Chinese-owned Sands Golf Resort Torquay received $500k for quarantining no one

Despite never housing a guest, a Chinese-owned golf resort received $511,000 in Victoria’s hotel quarantine program.

The Sands Golf Resort Torquay had been sanctioned by Australian Border Force for visa fraud six days before it received the first of two hotel quarantine contracts

A Chinese-owned regional Victorian golf resort received more than $500,000 to be part of the Andrews government’s hotel quarantine program despite never housing a single quarantine guest, weeks before it went into receivership owing creditors, including its 174 employees, more than $1m.

The Sands Golf Resort Torquay had also been sanctioned by Australian Border Force for visa fraud six days before it received the first of two hotel quarantine contracts spanning March 29 to May 29.

Former staff have told The Australian the contracts with the hotel — owned by the Chinese-linked Walden Cloud Group since 2017 — involved payment for 55 rooms at $150/room/night over the two-month period, seeing Victorian taxpayers pay out $511,500.

When it went into administration on July 11, Walden Cloud Group owed the Australian Taxation Office almost $992,000, having failed to submit a business activity statement due on April 28.

The Sands, on the southwest Victorian Surf Coast, is among more than a dozen hotels in the state awarded government retainer contracts worth millions of dollars, despite never accommodating any guests.

The resort had been owned by the Chinese-linked Walden Cloud Group since 2017

The revelations come as retired judge Jennifer Coate is on Friday due to hand down an interim report as part of her investigation into breaches by private security guards in the hotel quarantine program that led to Victoria’s second wave of coronavirus, causing the deaths of 800 people and putting Melbourne into lockdown for more than 3½ months.

Friday’s report is expected to focus on the measures required for Victoria to safely resume hotel quarantine for international arrivals. The full report, due on December 21, will make findings on the decisions and actions involved in establishing the program, which began in late March and was suspended in June.

Questions over what due diligence the Andrews government performed in awarding the contracts to Walden Cloud Group and the owners of other quarantine hotels will add to the pressure the Coate inquiry is facing to get to the bottom of who was respon­sible for the bungled scheme, following initial failures to request key documents, including communication records.

Former The Sands night auditor Aly Boland, 46, said staff at the resort had known for months that the business was in financial trouble when it received the first of the hotel quarantine contracts.

Documents filed with ASIC by the hotel’s owners note that superannuation had not been paid to employees. Picture: Peter Ristevski

“Each week we’d hold our breaths to see if we’d get paid,” said the Torquay mother, who thinks she is owed about $7000 in superannuation and entitlements after losing her job when the company went into administration on July 11.

Documents filed with ASIC by the hotel’s owners note that superannuation had not been paid to employees.

“We weren’t sure we were going to be able to serve alcohol on New Year’s Eve because they hadn’t paid the liquor licence bill, or some of the suppliers,” Ms ­Boland said. “At one point, well prior to COVID, we had to stop taking bookings because they hadn’t paid the laundry bill and we had no linen.

“People asked me why I was sticking around, and to be honest when we got the hotel quarantine contract, I thought, ‘Well at least there’s money coming in so we’ll hopefully get paid’.

“There was no training, nothing. A month went by and then there was another contract, but they still didn’t pay our super, so I guess that money just went to China. Who knows?

“I’m just a little bit taken aback by the fact that the government gave $500,000 to a company that clearly was being investigated by the ATO and Immigration.”

Another former employee speaking on the condition of anonymity said he was amazed the government had awarded such valuable contracts to the hotel. “Realistically, if anybody had come in and looked at the books, they would have seen that the company owed a lot of money to creditors,” he said.

Ms Boland said employees received federal government JobKeeper payments until the company went into administration. She said staff had become aware of a visa scam when one employee noticed his job being advertised online.

“He printed the ad out and slapped it on the general manager’s desk and asked what was going on,” Ms Boland said. “What they were doing was listing jobs and giving them to Chinese ­people just to get them visas.”

The ABF register of sanctioned sponsors shows that on March 23, less than a week before the first Andrews government contract was awarded, Walden Cloud Group was barred from sponsoring skilled foreign workers for three years after they were found to have breached three sections of the regulations.

Ataff became aware of a visa scam when one employee noticed his job being advertised online. Picture: Peter Ristevski

The breaches included “failure to ensure primary sponsored person works or participates in activity in relation to which the visa was granted” as well as failing to provide records and information to the Department of Home Affairs and Immigration Minister.

ASIC documents show Walden Cloud Group’s directors are 50-year-old Guoxin Zhou, born in Fujian, China and registered as living in Torquay, and 32-year-old Yang Sun, also born in Fujian, whose listed residential address is in the southwestern Sydney suburb of Turella.

Minutes of a creditors’ meeting held by administrators Paul Allen and Jason Stone of accounting firm PKF Melbourne on July 22 show Walden Cloud Group owed creditors, including the ATO, more than $1,126,000.

That sum does not include money owed to employees, but does include $52,271 owed to property investment company Huntercorp Investments and $32,780 owed to golf equipment manufacturer Acushnet Australia, as well as sums totalling almost $50,000 owed to a string of local small businesses providing services such as linen, turf maintenance, waste management, business machines, beer, wine, seafood and poultry.

An Andrews government spokesman said the government had “secured rooms from across Victoria as part of the emergency response to coronavirus. Contracts for hotels were regularly reviewed and either renewed or cancelled based on current and forecast demand.”

He confirmed The Sands Torquay had been contracted between March 29 and May 29, but said the value of the contract was “commercial-in-confidence” and could not be disclosed.