Clive Palmer's nephew and wife did a deal for Queensland Nickel to buy $135 million worth of shares in a coal project he was pursuing just five days before the company failed, the Federal Court has been told.
At the time the deal was done, on January 13 last year, Queensland Nickel was just days away from being placed voluntary administration.
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It's now being liquidated with debts of about $300 million. Its demise also cost about 800 Townsville refinery workers their jobs.
Liquidators, FTI Consulting, have won permission to examine former Queensland Nickel chiefs in the Federal Court.
Of primary concern are a number of transactions they say benefited other companies owned by Mr Palmer, but were of no benefit, and even detrimental, to the nickel company itself.
On Thursday, Queensland Nickel's former chief financial officer, Daren Wolfe, was grilled about the January 2016 deal, involving Mr Palmer's wife Anna Palmer and his nephew Clive Mensink.
At the time, Mrs Palmer was the sole director of her husband's China First company, which was pursuing plans for a new coal mine in Queensland's Galilee Basin, while Mr Mensink was the sole director of Queensland Nickel.
The deal committed the nickel company to buying $135 million shares in the mine developer and gave China First recourse to go after the assets of Queensland Nickel and its two parents companies in the event the refinery owner couldn't pay for the shares.
![Liquidators say a number of transactions benefited other companies owned by Clive Palmer, but were of no benefit, and ...](/web/20170210095801im_/http://www.theage.com.au/content/dam/images/g/r/g/p/r/l/image.related.articleLeadwide.620x349.gu9j9z.png/1486628483894.jpg)
It was inked in the offices of a Gold Coast law firm five days before cash flow and debt concerns prompted Mr Mensink to call in administrators.
Mr Wolfe told the court he didn't know anything about the deal until Mr Palmer asked him to go to the law firm, where he learned about it and acted as a witness as Mrs Palmer and Mr Mensink signed off on it.
"Is it the case that you didn't know this agreement was being negotiated until you were asked to witness it?" asked Walter Sofronoff, QC, for FTI.
"That's correct," Mr Wolfe replied.
He said Mr Palmer, Mrs Palmer and Mr Mensink were all present for the signing.
Asked why Queensland Nickel would enter into such a deal, Mr Wolfe said it allowed the nickel company to use mining tenements held by another of Mr Palmer's companies, Waratah Coal, as security to secure obtain finance, though that never eventuated because the business was unable to find a bank willing to loan it money.
Earlier in the day, the Federal Court refused Mr Palmer's bid to delay his examination in court, and he will have to attend on February 15.
As for Mr Mensink, who has been summoned to appear in absentia as he continues an extended overseas trip, there's been no word on where he might be or if an arrest warrant might be sought.
AAP