24/07/2014 - 13:37

Clive Palmer in fresh $12m CITIC suit

24/07/2014 - 13:37

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The legal battle between Clive Palmer and business partner CITIC Pacific has taken a new twist with the Chinese group suing the mining entrepreneur-turned-politician personally over the alleged removal of about $12 million from a trust account.

Clive Palmer in fresh $12m CITIC suit
Clive Palmer.

The legal battle between Clive Palmer and business partner CITIC Pacific has taken a new twist with the Chinese group suing the mining entrepreneur-turned-politician personally over the alleged removal of about $12 million from a trust account.

In a statement of claim lodged in the Supreme Court of Queensland yesterday, CITIC has sought declarations of breaches of trust, equitable compensation payable by Mr Palmer, and court costs.

Mr Palmer and CITIC are currently embroiled in a legal battle in the Supreme Court of Western Australia, an action Mr Palmer initiated almost two years ago in a dispute over royalties relating to the $7 billion Sino Iron project at Cape Preston, south of Karratha.

The incomplete magnetite project, which shipped its first ore to China late last year, is expected to ramp up to 24 million tonnes produced per year.

In its statement of claim, CITIC said Mr Palmer authorised the withdrawal of $10 million from an administrative fund bank account to his Cosmo Developments company in August last year.

This was followed by a $2.17 million withdrawal, again authorised by Mr Palmer, which was paid to Brisbane agency Media Circus in September, CITIC claims.

CITIC said the payments were not used as purported. It is understood the bank account was established for the purpose of managing the joint venture’s port interests.

“The description of payments in the payment ledgers of Mineralogy as being for ‘port management services’ is false,” the court document said.

Mineralogy is the sole shareholder of Cosmo.

Mr Palmer quit as director of Mineralogy earlier this year after joining federal parliament as a member of the House of Representatives. 

Mineralogy did not have the need to incur expenses in relation to the port or for port management services at the port in the sum of $2.167 million as at 2 September 2013, either in addition to expenses of $10 million or at all,” the documents said.

The civil action is a breakaway from CITIC’s preferred commercial dispute negotiation strategy.

In February, CITIC president Zhang Jijing said his company preferred to resolve any commercial disputes away from the public spotlight.

He said CITIC’s experience in developing its first Australian mining project had taught it to choose its counterparties very carefully.

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