The corrupt relatives behind one of Australia’s richest people

Phillip Dong Fang Lee has long been an enigma among his fellow rich listers. First there was the $39.9 million in cash he paid for his Point Piper mansion. Then there was the more than $2.2 billion he ploughed through Star’s Sydney casino. Last month, his 25-year-old son Felix Ming Ze Lee hosted a fundraiser for Prime Minister Anthony Albanese at the family home Mandalay.

One mystery has pervaded it all: how did a reclusive businessman of such obvious financial means become one of the country’s wealthiest people without ever starting a major corporate enterprise in Australia?

Under scrutiny from the Australian Taxation Office over a $280 million debt, Lee said the hundreds of millions of dollars sent to his Australian bank accounts from China were, by and large, loans from his wealthy mother, Zhangzhu Li.

It is not a story the tax office accepts. In a detailed affidavit before the Federal Court, the ATO alleges Phillip Lee secretly controlled business and financial interests in China despite vowing to Australian authorities that he had sold his Chinese business assets, and that the purported loans from China were “sham arrangements” designed to conceal the true source and character of foreign income. There is no suggestion by this masthead that the allegations are true, only that they were made.

His son, Felix Lee, who hosted Albanese along with Commonwealth Bank chief executive Matt Comyn and former Victorian premier Dan Andrews for the $10,000-a-head Labor fundraiser at his mansion last month, echoes the claim that his 92-year-old grandmother controls the family wealth.

Former federal treasurer Joe Hockey, now chairman of Felix Lee’s family office, harbours no doubts about the provenance of the Lee family’s wealth, describing it as “very genuine, very real”.

“His family made money out of infrastructure in China. So what? What’s wrong with that?” Hockey told the Australian Financial Review on August 3.

What Phillip Lee did not tell the tax office – despite three interviews with officials throughout its four-year investigation – were details about his relationship with Niu He’en, an infrastructure tycoon known in China as the “Bull Demon King” and “Ox Head”, who made his fortune overseeing highways between Shantou and the emerging metropolis of Shenzhen.

In the mid-1990s, Niu was the transport chief of Guangdong, a province with four times Australia’s population. He was also a provincial member of the Chinese People’s Political Consultative Conference, the Chinese government’s top advisory body.

Niu was accused in 2005 of abusing his position as a high-ranking party official to approve excessive charges in favour of Lee’s company Guangdong HuShen. In Chinese media coverage of the trial, Niu earned the nickname “generous father-in-law”.

Like Lee, Niu was also well known for his fondness for gambling. Business publication Caixin reported he always kept a mahjong set in his car when he travelled.

The high-profile corruption trial laid bare how Niu had overseen state losses of more than $20 million.