Citic threatens defamation against Palmer’s Mineralogy

Clive Palmer’s mining company Mineralogy has lashed out at estranged Chinese business partners Citic with claims they have made moves to “silence the truth” about comments made by director Clive Mensink.

Citic Limited chairman Chang Zhenming has appointed lawyers to pursue Mensink over comments he made that the Citic board had failed to disclose material information on the Hong Kong stock exchange.

A letter from Australian law firm Allens said the comments made in releases on September 26 and 30 contained defamatory claims, and the firm has demanded an apology and retraction.

“The Releases contain false and defamatory imputations concerning Mr Chang, including that he is dishonest; he lies to and intentionally misleads participants in the Hong Kong stock market and shareholders of Citic Limited; he conceals or suppresses information… from participants in the Hong Kong stock market, Citic Limited shareholders and the Chinese government; he recklessly breaches the law; and he engages in criminal conduct,” the letter claimed.

“These imputations are a serious attack by Mineralogy and you on our client’s integrity and have a real propensity to cause serious damage to his personal and professional reputation.

“Indeed the imputations appear calculated to do so.”

Mineralogy strongly rejected these allegations.

Last month Citic sought an injunction from the Supreme Court in Perth to prevent Mineralogy from cancelling its mining rights at the $8 billion Sino Iron project.

Citic was served the termination notice on September 12, however Mineralogy said the Chinese company did not declare it publically or make a statement to the Hong Kong stock exchange.

“Not only has Citic Pacific failed to rectify the defaults in the notice, the directors of Citic Pacific failed to declare the default notice to the market in Hong Kong and may have breached the law,” Mineralogy said in the September 26 release.

“The Hong Kong Stock Exchange and authorities should immediately commence an investigation into the failures of Citic Pacific and its directors to declare the default notice in 2012 and the current termination notice to the market.”

Citic was successful in blocking the 21-day notice in the Supreme Court, however Mineralogy has issued another 90-day termination notice.

A spokesperson for Citic said that notice was not new, and was one of about 30 notices of default lodged in September.

On Wednesday Mineralogy accused Citic of hiding “huge losses” of the Sino Iron project from the market.

“Mineralogy believes the only reason CITIC Limited took over CITIC Group was to create a much bigger balance sheet to hide the huge losses of the Sino Iron project from the market and the Chinese Government,” a statement read.

Clive Palmer is currently engaged in a legal dispute with Citic, which is claiming $12 million said to be misappropriated by Mineralogy and Palmer.

Image: Courier Mail

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.