Why I’m in the clear: Palmer speaks out
EMBATTLED Fairfax MP Clive Palmer has labelled FTI Consulting's report into Queensland Nickel a "beat up" and outlined why he believes he is in the clear.
Mr Palmer Wednesday afternoon released to the Daily the Queensland Nickel Joint Venture Agreement, in order to clarify what he considered to be inaccuracies in the report issued by Queensland Nickel administrators FTI Consulting.
In a scathing report, FTI Consulting said it considered Mr Palmer a shadow director of Queensland Nickel and said he and nephew Clive Mensink had been "reckless" in their operation of the refinery.
Mr Palmer released this statement to the Daily:
"This document will validate the structure of the Queensland Nickel Joint Venture Agreement but in short the report released yesterday is nothing more than a beat up," Mr Palmer said.
"Queensland Nickel Pty Ltd (QN) was the General Manager and Manager of the Queensland Nickel Joint Venture.
"As a manager, until March 3, 2016, QN had contractually agreed under Clause 4.1 of the Joint Venture Agreement to follow the direction of the Joint Venture Owners Committee in carrying out the Joint Venture."
The Daily was also provided with a copy of the Queensland Nickel Joint Venture Agreement, which he says outlines why he has no case to answer.
See the full document here.
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Mr Palmer's statement continued:
"The Joint Venture Owners Committee operates through its members to carry out the function of the Joint Venture Owners Committee in accordance with Clause 4.1 of the Queensland Nickel Joint Venture Agreement."
Clause 4.1 states as follows:
4. JOINT VENTURE OWNERS COMMITTEE
4.1 Establishment and Powers of Committee
The responsibility and authority for the conduct of the Joint Venture will be vested in a committee (hereinafter referred to as the "Joint Venture Owners Committee" or the "JVOC"), the purposes of which shall be to consider and determine general policy and strategic matters for the Joint Venture and to establish policies which shall achieve the aims and objectives of the Joint Venture. In particular, without limiting the foregoing, the JVOC will be required:
(a) to provide the Managers with directions in respect of the duties and responsibilities of the Managers and to monitor the performance of those duties and responsibilities in accordance with directions given;
(b) to establish and monitor the achieving of production and cost targets by the General Manager;
(c) to initiate consideration of proposed capital expenditures and Development Programmes;
(d) to review performance and financial reports furnished to it pursuant to Clause 5.3, as applicable;
(e) to cause to be prepared and/or maintained one or more manuals ("Project Manuals") in such form as it shall determine for the purpose of governing arrangements and procedures relating to the operation of the Joint Venture, which arrangements and procedures shall include:
(i) the personnel to be employed or retained by the Managers on behalf of the Joint Venture including the assignment of authority and responsibility to such personnel and the procedures for their hiring and discharge;
(ii) the entering into of contracts relating to the operation of the Joint Venture including the delegation of authority to the Managers or to one or both Joint Venturers to approve actions proposed to be taken pursuant to such contracts; and
(iii) the submission and approval of the formant and content of financial reports, performance reports, annual financial plans, Development Programmes, budgets for capital expenditure and budgets for Development Capital Expenditures for Development Programmes referred to hereinafter;
(f) to review and approve, with or without amendment, proposed financial plans for the operation of the Joint Venture submitted to it pursuant to Clause 6.2;
(g) to review and approve, with or without amendment, proposed Development Programmes initiated by it or submitted to it by any Joint Venturer or by a Manager as provided in Clause 5.3; and
(h) to review and approve, with or without amendment, proposed budgets for Development Capital Expenditures and proposed revisions to Approved Development Budgets and provided in Clause 6.3.
Mr Palmer said the Joint Venture Agreement was signed in 1992.
"At no time did I need to be a director of QN to ensure that operations were carried out in accordance with the directions of the Joint Venture Owners Committee.
"Any activity that I have been involved in since 2012 was as a member of the Joint Venture Owners Committee carrying out its functions,'' he said.
Clause 4.1 (a) states in detail the Joint Venture Owners Committee will be required "to provide the Managers with directions in respect of the duties and responsibilities of the Managers and to monitor the performance of those duties and responsibilities in accordance with directions given."
The General Manager's role is set out in Clause 5.2 of the Joint Venture Agreement and the General Manager (QN) role is set out in the Joint Venture Agreement as being "subject to the direction of the Joint Venture Owner Committee".
"QN was contractually bound to follow the Joint Venture Owners Committee in respect of Joint Venture business.
"QN is not and has never been a Joint Venturer. At no time was I a shadow director of QN,'' Mr Palmer said.
"The accounts of my two private companies, QNI Metals Pty Ltd and QNI Resources Pty Ltd have been lodged with ASIC for the past six years and contain all transactions referred to in the Administrators Report.
"QN is prohibited by Clause 5.5(b) of the Joint Venture Agreement to carry out any other role other than Manager while it is Manager.
"The allegations contained in the Administrators Report do not related to QN activity. QN has never had any beneficial ownership in the assets of my private companies including cash at bank.
"For the avoidance of doubt, I attach a full copy of the Queensland Nickel Joint Venture Agreement. FTI and Administrators are not administrators or liquidators of any of the Joint Venture Parties.
"In September 2015, the auditor of QN signed the 2013 accounts for QN Group confirming solvency. The Administrator say because of a default notice by Aurizon, QN could be insolvent
"On page 44 of the Administrators Report, they say 'The critical event which has driven the determination of the date of insolvency is the date Aurizon withdrew from the negotiated arrangements and issued a demand for payment of the total debt of $11.9M, being 27 November 2015'.
"What the Administrators do not say is that Aurizon agreed in writing to extend the time for compliance to 18th January 2016 so that a financing solution could be achieved.
"On 18th January 2016 when said solution was not achieved, the director then complied with his obligations and placed QN in administration. There was no insolvent trading,'' Mr Palmer said.