Clive Palmer Advised by ex-ASIC Chairman in Criminal Investigation Despite

  • The corporate regulator is close to launching civil or criminal action against businessman Clive Palmer and his companies.
  • Clive Palmer has hired ex-ASIC chairman Tony Hartnell to advise him on facing ASIC in the past, despite apparent conflict of interest.

As reported by The Australian and the Financial Review in September 2019, ASIC is advancing its criminal investigation against Clive Palmer and is inching towards pressing criminal or civil charges for corporate misgovernance, trading while insolvent and breaching his obligations under the law, including acting dishonestly or in bad faith. ASIC now aims to unite the different cases against Palmer into one. These include Queensland Nickel, Coolum Resort, Mineralogy and others.

This is somehow both unsurprising and shocking.
On the one hand, Palmer has been accused of several corporate breaches in recent years; he allegedly grossly mismanaged Queensland Nickel and caused its collapse in late 2015, failed to act according to agreement and contracts when buying the Gold Coast Coolum Resort in 2011 and  used some of his other companies, like China First, Mineralogy and others, in a series of complex transactions, loans and share acquisitions in order to transfer funds to Palmer’s own purposes. These accusations are massive and are supported by over 37,000 documents and 30 witnesses according to ASIC.

On the other hand, the investigations have not progressed since they were first opened in 2011 and 2015 respectively, for which ASIC has been criticized heavily.

Still, facing criminal charges by the corporate watchdog and other State regulators could be daunting. Perhaps this is why Palmer has gathered a team of experts and consultants to help him stay out of trouble – in the past, Palmer has indicated that he had hired the services of Tony Hartnell, once ASIC’s chairman, to his legal aid.

According to his website, Tony Hartnell is now a partner at Sydney-based law firm Atanaskovic Hartnell Lawyers. Among Hartnell’s “major areas of specialization”, he lists “Corporate and commercial law, particularly covering corporate financing, takeovers, prescribed interests and regulatory issues.”

A closer look at his resume reveals that Mr Hartnell served as Chairman of the Australian Securities Commission between 1989-92 and as Inaugural Chairman of the National Companies and Securities Commission between 1990-91. He was also a member of the National Companies and Securities Advisory Committee between 1990-92. These entities are what we now know as the Australian Securities and Investments Commission, or ASIC.

While Mr Hartnell is free to consult corporates and high net-worth individuals as he likes, a conflict of interest might arise from his working for Mr Palmer – Hartnell is known as one of ASIC’s founders, endowing him with a sense of authority pertaining to ASIC’s inner works.

And Palmer has certainly used this to his advantage. In a Facebook post from April 2018, he announced; “Inaugural ASIC chairman clears Palmer”. The post continues by claiming “Tony Hartnell, the founding chairman of the Australian Securities Commission, now ASIC, has cleared Clive Palmer from the charges that ASIC has brought against him”. Readers might understand from this post that ASIC officials have cleared Palmer of the allegations against him, but this is not the case; Palmer’s solicitor simply “asked a distinguished lawyer and founding chairman of the Australian Securities Commission, Tony Hartnell to consider” the allegations brought against him.

What this means is that Mr Palmer used Mr Hartnell’s services and received his opinion on the case, not that ASIC or anyone currently affiliated with ASIC officially and formally cleared him of the charges against him.

This seems highly misleading. How could Mr Hartnell have agreed to be included in such an announcement?

This isn’t the first time Mr Hartnell made headlines for the wrong reasons. In 2018, both him and Mr Atanaskovic were sued by private company Birketu for failing to supervise a junior lawyer from their firm who defrauded the former multimillion dollars. Back in 2009, he reportedly struggled to reach an agreement with the Tax Office over a $772,466 tax deduction.

Mr Harnell was reached for comment and when confronted about working with Mr Palmer he did not deny it, but refused to give a statement responding to why Mr Palmer claimed in his Facebook post on April 2018 that Mr Hartnell had cleared him of all ASIC charges. When probing further if there’s a conflict of interest with Mr Hartnell being a founding member of ASIC and now assisting someone who is facing ASIC criminal charges for misgovernance and trading while insolvent, Mr Hartnell declined to comment.

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