Palmer refinery financial woes deepen

By Jamie McKinnell
1 / 3

Palmer Aviation may cost nickel refinery

Clive Palmer's troubled nickel refinery could be liable for debts owed by his aviation business.

Clive Palmer faces the prospect of federal police and tax office probes into his business dealings amid deepening financial woes at his north Queensland nickel refinery.

Mr Palmer, who re-entered the Townsville venture last week when a new entity, Queensland Nickel Sales, took over from administrators, is facing accusations of running a "phoenix operation" where assets and cash are moved to other entities before a business folds.

The businessman-turned-politician is also being accused of acting as a "shadow director", with Liberal National Party MP Ewen Jones seeking an investigation.

"The role of the member for Fairfax (Mr Palmer) cannot be underestimated here," Mr Jones told parliament under privilege on Wednesday.

Mr Palmer had been part of a deliberate exercise to avoid paying creditors and staff entitlements, he said.

The jobs of 550 refinery workers remain in limbo after Mr Palmer gave a list of demands to be met if the plant is to be operational again from the end of July.

It is understood Mr Jones will write to the Australian Federal Police, Australian Taxation Office and parliament's privileges committee regarding the saga.

The Fairfax MP was "at times in charge of Queensland Nickel", according to Prime Minister Malcolm Turnbull.

Mr Palmer denied he was at the helm when decisions about the workforce were made.

As sacked workers consider a community buyback proposal from a regional investment bank, creditors committee meeting documents revealed his ailing Yabulu refinery could be in for more financial pain.

Palmer Aviation, which went into liquidation in February, owes nearly $26 million and the sale of its sole asset - a luxury jet - is unlikely to cover the debt.

The refinery already owes more than $100 million to creditors and the documents, lodged with ASIC, reveal it may have to pay debts owed by Palmer Aviation.

They also show Queensland Nickel's administrators, FTI Consulting, will be paid more than $1.6 million for managing the refinery for little more than a month before Mr Palmer seized back control.

Meanwhile, a multi-million dollar court case launched by Queensland Nickel was on Wednesday taken over by two companies owned by Mr Palmer.

The claim against Sino Iron was launched last year, claiming the alleged non-payment of royalties to the company hindered upgrades at its troubled Townsville refinery.