Huang Xiangmo's assets frozen as Tax Office pursues him for $140 million

Exiled billionaire Huang Xiangmo, a central figure in the NSW corruption watchdog's investigation into Labor Party donations, has had his Australian assets frozen as the Tax Office pursues him for $140 million.

The ATO sought urgent orders in the Federal Court in Sydney on Monday to freeze the local assets of Mr Huang and his wife Jiefang as it seeks to claw back millions in allegedly unpaid tax and penalties.

Huang Xiangmo on the balcony of his Mosman home before his permanent residency was cancelled in December.Credit: James Brickwood

Mr Huang, a wealthy property developer and major political donor, has resided in Hong Kong since his Australian permanent residency visa was cancelled on December 5 last year for reasons including character grounds.

"Both Mr Huang and Mrs Huang are now out of the jurisdiction," the ATO's barrister, Anthony McInerney, SC, told the court on Monday.

The couple's local assets include a $13 million Mosman mansion, held in Mrs Huang's name.

The powerful Chinese businessman has emerged as a key figure in the Independent Commission Against Corruption's high-profile inquiry into an alleged scheme by the NSW Labor Party to conceal a $100,000 cash donation allegedly made by Mr Huang before the 2015 state election.

Property developers have been banned from making political donations in NSW since late 2009, under laws introduced by the then Rees Labor government.

The ICAC has heard allegations Mr Huang delivered the cash personally to the ALP's Sydney headquarters in a plastic Aldi shopping bag after a Chinese Friends of Labor fundraising dinner in March 2015. Mr Huang denies making the donation and declined to give evidence before the inquiry by videolink.

Labor's 2015 fundraising dinner at The Eight restaurant in Chinatown. Pictured are Ernest Wong, second from left; Bill Shorten, third from left; Huang Xiangmo, second from right; and Luke Foley, far right.

Mr McInerney told the Federal Court the Tax Commissioner had initiated an audit of Mr Huang in 2017. The businessman was not accused of tax evasion or fraud but the ATO believed he had "grossly understated his income" between 2013 and 2015 and made "false or misleading statements" in income tax returns, the court heard.

Mr McInerney anticipated there would be a legal contest about the tax properly payable by Mr Huang. The court heard Mr Huang was hit with a $140 million tax bill on September 11 this year.

The bulk of the tax bill was attributed to the sale of a mansion in Hong Kong, which was said to give rise to a capital gains tax liability. The balance related to smaller "unexplained deposits" in bank accounts, the court heard.

Mr McInerney said Mr Huang had taken "no active steps to dissipate" his local assets but he was "evincing an intention to no longer have an association with this country" and the Tax Office feared he would either sell or "encumber" his local assets to put them beyond its reach.

Neither Mr Huang nor his lawyers were in court to respond to the claims.

Mr McInerney said information from government agency AUSTRAC revealed Mr Huang had transferred tens of millions of dollars into and out of the country between January 2016 and August this year. There had been an "increasing outflow of money, particularly since December 2018", he said.

Justice Anna Katzmann said she was "satisfied that an order should be made" against Mr Huang and his wife, and reasons would be given at a later date. Mr and Mrs Huang may elect to challenge the freezing orders in court. The matter returns to court on Friday.

Former NSW Labor Senator Sam Dastyari was forced to resign from federal politics in 2017 over his connection to Mr Huang.

The Herald and The Age have previously reported that Mr Dastyari warned Mr Huang in person in 2016 that his phone was likely bugged by government agencies.

The meeting occurred after ASIO briefed senior political figures, including from the Labor Party, that Mr Huang was of interest to the agency over his opaque links to the Chinese government.

Mr Dastyari told the ICAC last month that "in hindsight, I now have serious questions about whether or not [Mr Huang] ... was, either directly or indirectly, an agent of influence for the Chinese government".