Police launch Clive Palmer probe over $12m in Chinese funds
POLICE are investigating Clive Palmer’s allegedly fraudulent siphoning of more than $12 million in Chinese funds that he used to bankroll his political party into last year’s federal election.
Senior government sources revealed yesterday a preliminary investigation into claims of dishonesty had begun in Western Australia after high-level briefings of police in Perth.
The Australian understands that West Australian Premier Colin Barnett and senior cabinet colleagues have been told that the police probe has been furnished with serious allegations backed by key documents.
Uncontested evidence, including affidavits and cheques from an ongoing civil case against Mr Palmer in the Queensland Supreme Court, are being given to police in Perth by representatives of the Chinese government-owned company Citic Pacific.
Dossiers of evidence are also going to Queensland police because of the cross-jurisdictional characteristics of the case.
Senior government sources said the Citic Pacific group, Beijing’s international investment vehicle, had told Australian officials the handover to police for a criminal investigation was unavoidable. “The Chinese government’s company is adamant that it has been ripped off and it is determined to see this case right to the end,” a senior government source said yesterday. “They have left us in no doubt that they are going to take it as far as it can possibly go.”
Mr Palmer, who has attacked the Chinese company for failing to pay him hundreds of millions of dollars in royalties for extracting iron ore from his tenements, strenuously denies any wrongdoing.
In angry responses to questions from
The Australian, he has repeatedly rejected as “untrue” the accusations of dishonesty, levelled in civil proceedings over his allegedly fraudulent conduct.
He has walked out of two live ABC TV interviews during questioning about the case, telling
Lateline’s Emma Alberici last week: “This is just because the Chinese government wants to control our ports. And they want to take control of our resources.”
The Chinese government suspects that offences including fraud and theft have occurred in WA, where a National Australia Bank account — “Port Palmer Operations” — was based, as well as in Queensland, where $10m and $2.167m in withdrawals by Mr Palmer in August and September last year were funnelled. Other potential offences have been cited.
The Chinese have resolved that they believe the evidence is too troubling to be limited to civil proceedings against the backdrop of a soured business deal, according to a government source.
The political sensitivities are such that Mr Barnett and Queensland Premier Campbell Newman are understood to be determined to remain at arm’s length from operational aspects of the investigation by police in their respective states.
The Pilbara iron ore project at the centre of the bitter dispute with Mr Palmer is China’s largest in Australia, involving a spend by Beijing of almost $10 billion after huge cost blowouts and tens of millions of dollars spent on litigation with the federal politician.
Sources close to Mr Palmer have expressed concern that his public comments about the case have made his legal predicament worse, particularly after he described the Chinese as “bastards” and “mongrels” earlier this year. The outburst dashed the already remote prospect of any settlement between Mr Palmer and Citic.
The move by the Chinese authorities to raise the stakes and make formal representations to police coincided with the G20-related visit to Australia by China’s President, Xi Jinping, last week. The timing of the police case was influenced by the availability of evidence from Queensland legal proceedings against Mr Palmer, and not Mr Xi’s visit, according to government sources.
Mr Palmer did not respond to
The Australian’s questions yesterday. A Citic Pacific spokesman also declined to comment.
Since
The Australian first reported in May this year that Mr Palmer was being accused of wrongfully siphoning Chinese funds from an account set up to pay for the costs of operating a remote port for exports of iron ore, hundreds of pages of evidence have been obtained by Citic Pacific from the NAB, as well as Mr Palmer’s companies, staff, contractors, advisers and his office landlord.
Since the initial revelations, Mr Palmer has repeatedly tried to repay more than $12m, which he has withdrawn and spent mostly on PUP (about $10m for electoral and advertising costs), as well as on creditors including American Express (about $97,000).
Mr Palmer was the sole signatory on the NAB account, and copies of several cheques that have been exhibited in legal proceedings show that he personally withdrew the funds and spent the money.
In his reply to Citic’s Queensland Supreme Court “breach of trust” case, Mr Palmer also admits he signed and executed a document that he falsely backdated by 11 months to provide an explanation for his siphoning of the Chinese funds for his own use.
The document, titled Port Management Services Agreement, has been described by the Chinese government-owned companies as a “sham transaction” and a fabrication, as it attempted to provide a legal justification for Mr Palmer to make the cash withdrawals.
In the Supreme Court case starting on Wednesday, the Chinese companies seek declarations by judge David Jackson QC that Mr Palmer acted fraudulently and dishonestly, as he knew the money was meant to be spent only on port operations. This was set out in a “facilities deed”, signed by Mr Palmer. Mr Palmer’s company Mineralogy was not in possession of the port nor was it operating the port at the time the Chinese were told their funds were spent on “port management services”.
A large part of Mr Palmer’s defence is that the funds were not trust funds, and that they were his to use as he saw fit once they were transmitted by the Chinese to the bank account he controlled. “That money was paid as port services. Once it’s paid to our company, it’s no longer their money, it’s our money and how we spend it’s our business,’’ Mr Palmer said.
http://www.theaustralian.com.au/new...in-chinese-funds/story-fng5kxvh-1227132451156
