Palmer enters fight at Central Petroleum

30 May 2012, 6:43 am   -   Source: AAP
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(Getty)

(Getty)

Clive Palmer has demanded sacked CEO John Heugh be reinstated ahead of a shareholders meeting of conflict-ridden Central Petroleum next month.

Billionaire businessman Clive Palmer has bought into a brawl at explorer Central Petroleum, demanding sacked founding boss John Heugh be reinstated.

Mr Palmer accused Central's board of acting against shareholders' interests, holding the company back from becoming a producer to position it to be snapped up cheaply by a large oil company.

Mr Palmer, who says his 4.8 per cent stake through Petroleum Nominees makes him Central's biggest shareholder, is opposing industry veteran Richard Cottee's proposed appointment to the top job two weeks ago.

He will also push for board representation at an extraordinary general meeting of shareholders to resolve the issues on June 22.

He has nominated three Petroleum Nominees directors for positions on Central's six-person board.

Central holds a 29 million hectare area in central Australia - double the size of the UK - with ambitious prospective oil, gas, helium and coal assets.

An oil discovery was made at a well last year, but the board had blocked Mr Heugh from developing it, Mr Palmer said.

Ongoing appraisal and/or drilling work is due to continue this month.

"The previous managing director founded the company, found the oil, he was recommending that they get it into production and these guys said they didn't want to," he told AAP.

"You've got to ask the question: Why was that? Is it a fact that all these guys used to work for large oil companies?

"Are we going to see a situation where large oil companies come along and trample on the rights of shareholders?

"It was discovered over a year ago, nothing happened, shareholders haven't got a return, why run a company down just to do a takeover from a large oil company?"

Mr Palmer has taken legal action to increase his stake.

There are also moves to spill the board at the meeting.

Mr Heugh was also quoted in a statement released by Mr Palmer, stating that Central should have been in significant oil production by now with attendant cash flow having executed significant farm-out deals.

He has taken legal action to fight his sacking.

The board accuses Mr Heugh of not following instructions and spending $15,000 in company funds on private detectives to investigate exploration manager Trevor Shortt, after a bitter falling out between the pair.

Mr Cottee could not be contacted for a comment.

The company's shares closed 0.5 cent weaker at nine cents.

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