Chinese billionaire wired bulk cash out of Australia when tax office probe began: Court
Exiled Chinese billionaire Huang Xiangmo had a motive and the means to dissipate his Australian assets while the tax office pursued him, a Federal Court judge ruled.
NSW
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Exiled Chinese billionaire Huang Xiangmo began transferring huge sums of cash offshore when he found out the Australian government was auditing him over a multimillion-dollar tax bill, a judge found.
On Monday the Federal Court granted an urgent order sought by the Australian Taxation Office to freeze the controversial businessman's local assets as it tries to claw back $140 million in unpaid tax.
“Mr Huang has both a motive and the means to dissipate his Australian assets,” Justice Anna Katzmann said in her reasons released on Wednesday.
“The amount of the tax liability is considerable and there is a real danger that, without the freezing orders, assets will be removed from Australia.”
Mr Huang, who is at the centre of a NSW Independent Commission Against Corruption probe into political donations to NSW Labor, is currently in Hong Kong after having his Australian permanent residency and citizenship bid knocked back last December.
Justice Katzmann said between January 2016 and August 2019 Mr Huang transferred tens of millions of dollars in and out of Australia but since his tax audit began the amount of cash moved offshore increased dramatically.
“The amount of money transferred out of Australia since December 2018 exceeds the amount coming in by $46,749,253, — nearly twice as much as the previous year,” she said.
Mr Huang was hit with the huge tax bill on September 11 — the same day his wife Jiefang Huang left Australia.
Justice Katzmann said Mr Huang displayed an intention to avoid paying tax by “grossly understating income” between 2013 and 2015 and since November has taken a number of steps towards severing his ties to Australia.
The judge said since any orders are not likely to be enforceable against Mr Huang in China and in Hong Kong, it is “critical that the Australian assets be preserved.”
The $140 million tax bill was mostly capital gains tax accrued by selling a mansion in Hong Kong and a number of smaller "unexplained deposits" in bank accounts.
That flat has now been frozen along with two of Mr Huang’s luxury properties in Chatswood and a $13 million Mosman held in his wife’s name.
The ATO also claims the property developer had made "false or misleading statements" in tax returns.
Justice Katzmann said Mr Huang could only use the money to pay his debt to the tax office, for legal costs totalling $50,000 or for “ordinary living expenses” of up to $10,000 a week.
ICAC is examining whether Mr Huang was the true source of $100,000 said to be donated by 12 people in $5000 chunks to Labor.
The property developer was prohibited from making donations to NSW political parties.
The tax dispute returns to the Federal Court on Friday.