‘In and out’ Palmer skips day in court

CLIVE Palmer skipped the second day of the trial over the collapse of his Queensland Nickel refinery, with the court told he would “come in and out”, as liquidators revealed the company was losing $5 million a month before its closure.

The trial continued yesterday despite the billionaire’s absence at the case in which liquidators will try to prove he acted as a shadow director and unlawfully operated the refinery while it was insolvent.

A lawyer for one of Mr Palmer’s companies, which are named alongside him as defendants in the case, told the court he understood Mr Palmer would “come in and out as he thinks the trial plan requires”.

The woeful financial position of the refinery was yesterday revealed by barrister for the plaintiffs Graham Gibson, who described Mr Palmer’s “extraordinary” financial decisions before the company went into administration in January 2016.

He said it was alleged Mr Palmer had misused refinery money to make millions in payments to his father-in-law Alexander Sokolov in Bulgaria and to mystery woman Evgenia Bednova in Kyrgyzstan.

“There’s a series of claims made that funds of QNI were used for purposes not relating to the joint venture and representing a misuse of the company’s funds,” Mr Gibson said.

“(Experts) can’t find any records which explains the basis for the payment of those fees to either of those people (Sokolov and Bednova).”

Mr Gibson said on the liquidators’ case, the refinery had unlawfully operated while insolvent and Mr Palmer had acted as a shadow director.

“As at January 13 (2016), the position generally was that QNI was making losses, they were of the order of at least $5 million a month, it had considerable unsecured creditors in the many millions of dollars, it had a cash deficiency of some $25 million, it was already insolvent on our case since October 9 some three months earlier,” he said.

The court heard despite that position, days before the company went into administration, Mr Palmer had the collapsing QNI enter into a secured agreement to purchase 4.7 billion shares from Palmerowned company China First for $135 million, despite it only having a paid out capital of $2.

The deal meant China First became a secured creditor ahead of QNI employees and trade creditors when the company went into administration days later. The case will resume on Monday.