Clive Palmer is running a multimillion-dollar campaign against the corporate regulator. The only question is: What does he hope to achieve? By Mike Seccombe.
Clive Palmer’s method of attack
You could hardly think of two more dissimilar people than James Shipton and Dee Snider.
Shipton, the outgoing chair of the Australian Securities and Investments Commission, Geelong Grammar old boy, former Goldman Sachs banker, scion of a patrician Melbourne Liberal Party family, looks like he was born in a business suit.
By contrast, Snider’s glam-metal persona as lead singer and main songwriter of the band Twisted Sister involved a rippling bare torso, flying blond curls, lots of tattoos and extravagant eye shadow, rouge and lipstick.
And yet this week, as Anil Hargovan read through the judgement in a Federal Court case involving Snider, he was struck by the commonality shared between Mr Twisted and Mr Straight.
And it related to Clive Palmer.
It was not just the fact both Snider and Shipton are involved in legal action against the mining billionaire. The cases are very different in nature – two ongoing ASIC matters relate to corporations law, while the Universal/Snider one related to copyright. The similarity, Hargovan noted, was the way in which Palmer went about defending himself.
“When I focused on observations made by the judge,” Hargovan, a corporate law and governance expert with the Australian School of Business at the University of New South Wales, said, “my jaw dropped, because I saw the parallels with what’s going on with his attacks on ASIC and Shipton.”
One paragraph in particular in Justice Anna Katzmann’s decision drove it home to Hargovan. In ordering Palmer to pay $1.5 million for copyright infringement in his blatant ripoff of the Twisted Sister song “We’re Not Gonna Take It” – making it the theme song in his campaign at the 2019 federal election – she noted that Palmer: “taunted, mocked and derided Mr Snider in both mainstream and social media, perhaps for his own amusement but doubtless to attract publicity for himself … he offered no apology either to the Court or to Mr Snider for the misrepresentation and, as Universal submitted, he gave the distinct impression that he was indifferent to the truth”.
Palmer’s modus operandi is the same in relation to ASIC and its chairman, Hargovan says, but a lot more worrying. It’s one thing to publicly malign an American rock star, but quite another to malign an organisation and people charged with regulating the Australian corporate and financial system.
Over the past six months the billionaire miner and property developer has embarked on a typically all-stops-out campaign against ASIC and Shipton, on social media and in scores of ads in newspapers including The Australian, The Sydney Morning Herald, The Age and The Australian Financial Review. The ads all featured the familiar black and yellow format used by Palmer’s political party.
Published estimates of how much Palmer has spent buying the ads range from $1.7 million to about $4 million. These are rubbery estimates, given that Palmer might have received discounted rates, as big advertisers often do, and Palmer himself has refused to provide a tally.
Suffice to say, the sums he has spent are huge by the standards of normal people, although they are trifling for Australia’s eighth-wealthiest man, whose net worth stood at $9.76 billion in February this year, according to The Australian’s billionaires list, having grown by almost $1.5 million a day over the preceding 12 months.
The particular focus of Palmer’s ads has been the revelation in October last year that taxpayers were charged about $118,000 for advice provided by KPMG relating to Shipton’s complex tax affairs, along with about $78,000 in fringe benefits tax.
After questions were raised by the Auditor-General’s Office – that the payments might have exceeded limits applicable to public sector workers, and might also have breached procurement guidelines – Shipton stood aside and the government ordered a further inquiry.
Palmer immediately went on the attack. In a flurry of tweets on November 16, for example, he accused Shipton of “ripping off Australians to pay for personal tax advice” and trying to “cover it up”.
It was “beyond belief”, Palmer wrote on Twitter. “James Shipton continues to have his snout in the trough, having a feeding frenzy at the tax payers’ expense.”
Palmer’s posts went on to accuse ASIC of having failed as a corporate regulator and of allowing the banks to “destroy the lives” of Australian families. Palmer demanded a royal commission into ASIC.
His print media ads were no less incendiary. He dubbed the ASIC chairman “shifty Shipton”. In one, he effectively accused Shipton of being an agent of Chinese interests. The ad featured a headshot of the ASIC chief, superimposed on the Chinese flag, and the headline: “James Shipton’s relationship with China should concern Australians”. The text claimed there was a deal with China to “send sensitive information to a communist dictatorship”.
The ads also repeatedly targeted Prime Minister Scott Morrison and Treasurer Josh Frydenberg for not sacking Shipton.
And they did not stop after Frydenberg announced, on January 29, that while the independent inquiry had cleared Shipton of any wrongdoing he would nonetheless quit his role as soon as a replacement could be found.
They did not stop even when it was announced, two weeks ago, that long-time investment banker Joe Longo – whose career includes 17 years with Deutsche Bank – would take over the ASIC chairmanship from June 1.
In response to that news, Palmer tweeted: “Following the banking inquiry, ScoMo wants to appoint a banker to head ASIC to regulate the banks. Tell him he’s dreaming.”
No doubt, Hargovan says, there are valid criticisms to be made of ASIC’s performance. And they were forcefully made in the findings of the royal commission into misconduct in the financial sector.
“But to suggest that ASIC’s law enforcement decisions are tainted by political influence or corruption – as suggested by the Palmer’s ferocious attack ads – is a step too far,” Hargovan says.
“They … border on malice or contempt for the corporate regulator, and can potentially give rise to a defamation action should the chair of ASIC seek to defend his reputation.”
Through a spokesperson, Shipton declined to comment on Palmer’s attacks. He would not say whether he was contemplating a defamation case. But Michael Bradley, managing partner at Marque Lawyers, said Palmer’s behaviour was “clearly actionable”.
Not only would Shipton have a “pretty good case” against Palmer, Bradley says, but the media outlets that published his ads could also “be in the frame”.
But Palmer has never shown any fear of legal action. Indeed, he has previously listed litigation as one of his hobbies. And he has had some big wins, notably in his long-running battle with the Chinese iron ore miner CITIC over royalty payments.
A comment by the judge in one of the many actions between Palmer and CITIC gives some idea of the former’s ferocious litigiousness:
“The nature of the parties’ trenchant disputation extends well and truly beyond more typical commercial disputes. The sums of money at issue are mind-boggling to the average person. And these parties take, in effect, an attritional approach to all their extensive litigation in that virtually every point becomes a matter of controversy.”
At current iron prices, according to one recent estimate, Palmer’s private company Mineralogy is getting about $523 million a year in royalties from CITIC, and would likely receive an additional $250 million a year from a planned expansion of operations.
Given his enormous wealth, Bradley notes, the potential costs of litigation simply don’t amount to a “level of materiality” that would concern Palmer. Bradley puts it in simple terms: “He just doesn’t care.”
But that does not explain why Palmer went after Shipton and ASIC in the first place.
Helen Bird, a senior lecturer in corporate governance at Swinburne University law school, points to the two actions ASIC is currently pursuing against Palmer.
The first of them alleges Palmer and one of his companies, Palmer Leisure Coolum, committed criminal breaches of takeover law in relation to a proposal in 2018 to buy out investors in a timeshare development at Coolum in Queensland, which subsequently did not proceed.
The charges carry a maximum penalty of two years’ imprisonment and a fine of $11,000 for an individual, or fines of $55,000 for a corporation.
The more interesting one, though, is the second, in which Palmer is accused under federal corporations law of having breached his duties as a company director, and under Queensland criminal law of fraud by authorising the transfer of $10 million from his company, Mineralogy, to the benefit of the Palmer United Party, three weeks before the 2013 federal election.
If convicted, he faces up to five years’ jail on each charge, although the fraud charge can lead to up to 12 years’ jail if there are aggravating circumstances.
Bird suggests Palmer launched his campaign of attack ads as a way of putting pressure on the Morrison government, possibly hoping the charges would be dropped.
She believes he is intent on reminding the government that it owed its election in 2019 in part to his campaigning.
“It’s definitely a pressure play by him,” says Bird. “In the context where there’s a lot of attention being paid to ASIC and the way it’s doing its job – and certainly the treasurer doesn’t love them – [Palmer’s] just putting more pressure on.”
She doubts that Palmer’s ads will be effective. In fact, they will likely have the opposite effect, and make ASIC more determined.
“He was trying to say ‘Give up.’ But I don’t think that was ever going to happen. I think, from ASIC’s point of view, they’ve seen too much of him. They know what he’s like.”
In short, and to quote Dee Snider’s famous and famously litigated song, they’re not gonna take it anymore.
This article was first published in the print edition of The Saturday Paper on May 8, 2021 as "Clive Palmer v the world".
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