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Administrators allege Queensland Nickel directors have acted 'recklessly' -

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MARK COLVIN: Administrators for Clive Palmer's Queensland Nickel have delivered a scathing report on the troubled company's state of affairs, and recommended it be wound up.

The report from FTI Consulting says both Clive Palmer and his nephew Clive Mensink appear to have acted recklessly at the helm of Queensland Nickel.

Courtney Wilson.

COURTNEY WILSON: For three months, administrators have been poring over Queensland Nickel's books.

Today John Park from FTI Consulting confirmed what many people already suspected.

JOHN PARK: In our view, the winding up of the company appears to be the most viable option for creditors.

COURTNEY WILSON: Debt-riddled Queensland Nickel was thrust into the hands of voluntary administrators in January.

But the administrator says in their view the company, which previously ran the Clive Palmer's north Queensland nickel refinery, had been insolvent since last November.

The report to creditors today says both Clive Palmer, and his nephew Clive Mensink, appear to have been reckless in exercising their duties and powers as directors.

JOHN PARK: At a very high level, we saw Queensland Nickel as what I'd say the piggy bank, the treasury and it was the money was coming through Queensland Nickel and the better times and it was being dissipated amongst the Palmer empire entities as to where it was required.

COURTNEY WILSON: The report details how in November 2012, Mr Palmer instructed Queensland Nickel to transfer $43 million out of the company to a number of entities, including nearly $15 million to himself.

And between August 2012 and June 2013, the company paid for a number of vintage cars, which ended up at Mr Palmer's Sunshine Coast resort.

John Park says administrators found evidence to suggest Clive Palmer continually acted as a shadow director of Queensland Nickel, signing off on expenditure, using an email alias.

JOHN PARK: The use of the alias Terry Smith was raised from day one on 18 January. So we've certainly seen through our forensic exercise the use of that in the approvals on both positive and negative expenditure requests.

COURTNEY WILSON: Clive Palmer continues to rigorously deny the allegation he's been acting as shadow director.

CLIVE PALMER: I am a member of Parliament. I retired from business three years ago. This is the biggest beat-up. There's always something happening to Clive Palmer.

COURTNEY WILSON: Mr Palmer says he made decisions about Queensland Nickel's expenditure as a member of a joint venture committee.

Administrators have pointed to a possible breach in fiduciary and common law duties by Mr Palmer and other directors, and have referred the matter to the corporate watchdog.

Corporate Law expert Ian Ramsay from Melbourne University says any breach would have to be proven in court.

IAN RAMSAY: But it is undoubtedly an important question because all directors, including the properly appointed director and anyone who might be a shadow director, they need to act in the best interest of the company.

And acting it the best interest of the company means spending the funds of the company in a way that's appropriate to advance the interests of the particular company.

COURTNEY WILSON: Prime Minister Malcolm Turnbull says the failure of Queensland Nickel could be Mr Palmer's undoing.

MALCOLM TURNBULL: Assuming he renominates, I think the electors of Fairfax will cast a very stern judgement on him.

COURTNEY WILSON: Queensland Nickel owes almost 800 former workers about $74 million, and its unsecured creditors a further $116 million. If it is liquidated, sacked workers may only be paid up to 52 per cent of what their owed.

Norm Napier, who worked at Queensland Nickel for nearly 40 years, isn’t happy.

NORM NAPIER: We’re really doing it tough at the moment, so yeah, we need something done about this bloke.

COURTNEY WILSON: Opposition leader Bill Shorten today hit out at the Federal Government for not fast-tracking the federal entitlements guarantee scheme, so sacked workers can get some money coming in.

BILL SHORTEN: I’m really disappointed that Mr Turnbull has failed to act in the weeks since, when in fact we could all see what was needed to be done.

COURTNEY WILSON: Minister for Employment, Michaelia Cash, released a statement saying it's treating the issue as a matter of priority.

If the Government does pick up the tab for workers' redundancy payments, it will be the largest payout in Australia's history under the current scheme.

Queensland Nickel creditors will decide whether to accept the administrator’s recommendation to liquidate at a meeting to be held next week.

MARK COLVIN: Courtney Wilson.