Chinese state-backed conglomerate Citic Ltd. has confirmed a US$2.5 billion writedown on its iron ore joint venture with Australian politician and businessman Clive Palmer, Financial Times reported.
The writedown includes US$1.7 billion in intangible value and US$794 million in the value of property and equipment at the Australian project, the report said.
Citic and Palmer are embroiled in an increasingly acrimonious dispute over Sino Iron, the ill-fated venture that was already five times over budget before iron ore prices collapsed.
The Chinese group has accused Palmer of misusing A$12 million (US$9.5 million) through his company Mineralogy to finance his election campaign. He denies the allegations and claims that Citic owes him royalties related to Sino Iron.
Citic reported on Tuesday that its net profit dropped 20 percent last year to HK$39.8 billion (US$5.1 billion) as a result of the Sino Iron charges.
Without those, profits would have risen 10 percent led by a strong performance from Citic Bank, the group said.
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