Salim Mehajer alleged to have moved $20m to Lebanon

The ex-deputy mayor of Auburn council, Salim Mehajer, and his father allegedly transferred more than $20m to Lebanon.

Former Auburn deputy mayor Salim Mehajer said his personal and company transactions “are carried out under strict legal advice”. Picture: John Grainger.

The controversial former deputy mayor of Sydney’s Auburn council, Salim Mehajer, and his father allegedly transferred more than $20 million offshore.

The Australian understands that NSW police have prepared a report on the transfer, which is thought to have been made to one or more accounts in Lebanon.

No laws have been broken by the alleged transfer — offshore transfers are perfectly legal — however it is understood to have attracted police attention given the controversy surrounding Salim Mehajer as a result of his tenure at Auburn City Council and his involvement in a string of legal battles.

Mr Mehajer’s failed property development company, SM Project ­Developments, is being pursued by the Australian Taxation ­Office for unpaid taxes of more than $1m.

Mr Mehajer followed his ­father, Mohamad, into property development, later taking control of family companies.

Mohamad Mehajer has previously been the subject of police attention and was in 2013 sentenced to 3½ years’ prison for fraud. In 2008, in a bid to keep the struggling SM Project Developments afloat, he unsuccessfully attempted to bribe a bank ­employee with $2000 to approve a loan and overstate by 30 times the income of the development company.

Mohamad Mehajer and his wife Amal migrated from Lebanon about two decades ago.

The police report on the ­alleged money transfer is understood to have been sent to the ATO. Police and the ATO ­declined to comment.

Under money transfer laws, banks and other institutions are required to report to financial ­intelligence agency AUSTRAC all offshore transactions of $10,000 or more. However, the parties involved in those institutionally facilitated transfers are not required to make any ­notifications.

Queried by The Australian about the funds transfer, Mr ­Mehajer said his personal and company transactions “are carried out under strict legal advice” and always at “arm’s length”.

Auburn council was sacked and a public inquiry launched by the NSW government in February following revelations of ­alleged improper conduct by some councillors — who were also property developers or worked in the property sector — and an ensuing public outcry.

The NSW government has since introduced measures aimed at improving the functioning and transparency of local councils. Those include $2500 caps on ­donations to candidates, in changes dubbed the “Mehajer ­reforms”.

The Auburn inquiry heard evidence in private last month from five former councillors. Transcripts of those hearings have since been released, but the transcript of Mr Mehajer’s evidence was heavily redacted at his lawyers’ request.

Much of the suppressed ­material is understood to relate to his proposed purchase of a development site from the council, his lawyers arguing the dealings­ ­included commercially sensitive information.

The public inquiry continues.