Clive Palmer’s estranged Chinese business partners are seeking in compensation over legal claims the now federal MP facilitated the misuse of funds.

Clive Palmer’s estranged Chinese business partners have accused the federal MP of assisting his mining firm’s “fraudulent breach of trust” over the use of $12 million in funds.

Sino Iron and Korean Steel – subsidiary companies of CITIC Pacific, which is owned by the Chinese government – filed a lawsuit against Mr Palmer in the Supreme Court in Brisbane this week.

Documents filed with the court claim Mr Palmer “knowingly assisted” in Mineralogy’s “dishonest and fraudulent breach of trust”.

A statement of claim on behalf of the companies said Mr Palmer personally signed two cheques – one allegedly for $10 million made out to a firm he controlled – from a bank account funded by CITIC, knowing the payments weren’t for port management services as specified.

Mr Palmer, now a federal MP and leader of the Palmer United Party, denies any wrongdoing.

Mineralogy remains locked in bitter legal disputes with CITIC over iron ore and port issues in Western Australia’s Pilbara region.

The two groups entered into an agreement relating to the development and operation of Cape Preston Port in WA in 2001.

The CITIC firms now claim that between 2010 and 2013 it deposited funds into a bank account which was to be used by Mineralogy for administration and day-to-day running costs of the port, according to the court documents.

The firms further claim Mr Palmer personally wrote out two cheques from this account – one for $10 million to Cosmo Developments, which is controlled by Mr Palmer, and another for $2.167 million to Brisbane agency Media Circus Network.

They also claim Mr Palmer was the sole signatory to the administration account and that the payments were made in 2013.

Payments to companies named Cosmo and Media Circus, believed to be a Brisbane production company, were described as “port management services”, but the CITIC companies claim neither company “provided any goods and services in relation to the port”.

“Mineralogy was not in possession of the port in the second half of 2013 and had not budgeted for $12 million and had no plan to incur any such expenditure,” court documents said.

“The description … of port management services was false.”

The CITIC firms argue the payments were made in “breach of trust” and were “dishonest and fraudulent” as they did not meet the terms of the administration fund.

Mr Palmer, who stood down as Mineralogy’s director earlier this year, told AAP on Thursday he has outstanding claims against CITIC worth tens of millions of dollars.

“So they’ve been very slow in suing me … it’s entirely predicable,” he said.

“The claims have no substance and it’s been done so they can get publicity because they’re losing the cases in court.”

The CITIC firms are seeking compensation and costs.