From reading an earlier report it appears Mr Zhou made inroads into the NSW Labor Party when those not so experienced ran the NSW Labor Party Office namely Sam Dastyari and Kaila Murnain …
AS you read on, and ponder where has Zhou’s money come from?
Zhou as an ‘Independent’ with a close association with Huang Xiangmo who has made large donations to the Liberal Party … just how ‘Independent’ is Mr Zhou? With many Liberal politicians and Councillors before him claiming to be ‘Independent’ …. is it possible he could be a double agent not only for the CCP but also for the LNP?
Donor Huang Xiangmo had help from Liberal Party Director; Met Christopher Pyne
NSW Liberals took Donations from Figure linked to Pro-Beijing Group and Huang Xiangmo
Huang Xiangmo this Chinese Mogul made powerful friends in Australia now he’s a Case Study on Worries over Beijing Influence
Chinese Communist Party-linked donor Huang Xiangmo’s former adviser joins John Alexander’s team on Bennelong campaign
SEARCH CAAN WEBSITE to find out more about:
Simon Zhou, Huang Xiangmo, Ernest Wong
Huang Xiangmo’s $135m planning windfall
The Chinese billionaire stands to make a $135 million profit from a Sydney planning decision, thanks to a local councillor who failed to declare a $4 million link to the developer.
Ryde deputy mayor Simon Zhou, left, with controversial Chinese political donor Huang Xiangmo. Zhou failed to disclose his financial links to Huang before the council approved a development set to make Huang over $130 million.
Edmund Tadros, Angus Grigg and Neil Chenoweth
Oct 30, 2019
Chinese billionaire Huang Xiangmo is set to make a $135 million profit from a Sydney planning decision, after the deputy mayor of a local council failed to declare his $4 million interest in another company owned by the property developer.
Simon Zhou, an independent who holds the swing vote on Ryde Council and is a key supporter of the Labor mayor, has only ever disclosed that he knew Mr Huang as a Chinese community leader.
But The Australian Financial Review can reveal that at the time council agreed to support the redevelopment of Eastwood Plaza, Mr Zhou had a financial connection with Mr Huang.
The council in north-western Sydney, which has seen a surge in Chinese-born residents and complaints about over-development, had previously rejected Yuhu’s proposal.
Just weeks after final planning approval was received in August, Mr Huang’s Yuhu Group was in sale discussions, seeking at least $190 million for the site having purchased it for $55 million in 2013.
Despite sitting on council as an independent, Mr Zhou has strong ties to Labor, having previously worked at its NSW head office, given generously to the party and run as a Senate candidate for the ALP at the 2016 election.
His mentor is former NSW Labor upper house member Ernest Wong, who has been accused by a NSW corruption inquiry of helping Mr Huang make an illegal $100,000 donation to the ALP. Mr Wong and Mr Huang deny the allegations.
Mr Zhou was joint emcee at a Chinese Friends of Labor dinner in 2015, where that donation was allegedly made.
Mr Zhou formed part of Ryde Council’s oversight for the Yuhu proposal, but absented himself from the critical vote on May 28 citing a “less than significant non-pecuniary interest”.
He told council he “knows Mr Xiangmo Huang as a Chinese Community Leader, who he believed to be a family member of the current owner of Yuhu Group”.
Mr Zhou failed to mention he had held a $4 million shareholding in a separate Yuhu company, which owns the $82 million Pymble Corporate Centre – a low-rise office complex on Sydney’s north shore.
That shareholding would not have increased in value because of the Eastwood plaza decision, but his failure to disclose the mutual shareholding with Mr Huang may breach disclosure requirements under the Local Government Amendment Act and the Code of Conduct for local councils.
“Councillors are required to disclose any kind of interest whether pecuniary or non-pecuniary,” said Professor Roberta Ryan of the Institute for Public Policy and Governance at the University of Technology Sydney.
“If there is any possibility of a perceived or actual conflict of interest, historical or current, then you must declare it.”
The 2015 Chinese Friends of Labor fundraising dinner, where Zhou was emcee, is under the ICAC microscope.
Mr Zhou transferred his interest in the Pymble Corporate Centre to his mother, and it was then transferred to a close business associate after Mr Zhou won a seat on council.
Mr Zhou failed to disclose this previous financial connection to Mr Huang prior to council beginning deliberations on the Eastwood Plaza redevelopment.
He is also an alternate member of the Sydney North Planning Panel, which ultimately greenlighted the Eastwood project.
“I’m just a person quietly doing my job,” Mr Zhou told the Financial Review on Monday. “I’m not someone that a business paper writes about.”
Those on council see it differently.
Enter the ‘kingmaker’
Jordan Lane, a Liberal member of council, said Labor mayor, Jerome Laxale, had relied on Mr Zhou’s support to get elected.
“It became obvious after the 2017 election that Simon [Zhou] would be the kingmaker on council,” he said.
“Despite the questionable public benefit, council actively embraced this unsolicited developer deal. While Yuhu will make a fortune, ratepayers are being ripped off.”
Simon Zhou was elected to Ryde council in 2017.
As the numbers currently stand Labor and the Greens, which comprise an informal bloc, have six votes on council.
Mr Zhou, as an independent, provides the crucial seventh vote on the 12-member council and was elected deputy mayor in September last year, with the support of this bloc.
Due to the tight numbers, if Mr Zhou abstains from a vote put forward by the Labor/Green bloc it will pass, as they will have 6 of 11 votes.
“Him leaving the chamber or abstaining is as good as voting for a motion,” Mr Lane said.
“If he does not vote, we can’t win.”
The mayor, Mr Laxale, said there was “no such thing” as a Green-Labor voting bloc and there were no voting arrangements between Mr Zhou and Labor.
He noted Mr Zhou had disclosed his relationship with Mr Huang and abstained from the Eastwood vote.
The matter was concluded by council in May after an outside body, the Sydney North Planning Panel, insisted Yuhu first negotiate a Voluntary Planning Agreement with the council.
The Yuhu motion was carried seven votes to four, as the other independent, Roy Maggio, also gave his support. That means it would have passed even without Mr Zhou’s absence.
Mr Maggio told the Financial Review that Mr Zhou had not disclosed a financial link with Mr Huang or Yuhu.
“If I knew there were financial ties, that would have changed my mind on how I voted,” he said. “We have to rely on the information given to us by the council officers. And they were very supportive of the proposal.”
Mr Zhou never stood to profit from the Eastwood Plaza development but had a shareholding in one of Mr Huang’s unrelated companies.
Professor Ryan said full disclosure was important, as council staff and a general manager who had no knowledge of councillors’ financial interests could be open to pressure from a mayor, or deputy mayor, who controlled their employment.
“The main thing is you put it on the record, so people can say, ‘Has the decision making process been fair?’” she said.
Mr Zhou declined to comment on his business affairs but said he acted with “utmost integrity” in all matters.
Yuhu Group was founded by Chinese businessman Huang Xiangmo.
“I vehemently object to any suggestions that my office or myself have been involved in any dishonest or questionable conduct pertaining to due process in council,” he said.
“I never tried to influence staff or councillors on this matter.”
“It is a pity that I couldn’t vote, but if I could, I would have voted for this proposal, because a new shopping centre including an upgraded Eastwood plaza [is] exactly what our local community has wanted for a long time.”
Mr Huang did not respond to questions from the Financial Review.
Labor took control of the Ryde council at the September 2017 election after getting four candidates elected, up from two before the poll. Its preferences then helped get two Greens elected, one of whom has since joined Labor.
Labor’s former rising star
As the swing member on Ryde council Simon Zhou’s presence, just as much as his voting pattern, is the crucial factor in determining council outcomes.
This makes the manner of his election in September 2017 all the more notable.
He decided to run for council despite not living in the Ryde local government area at the time, having few discernable links to the community, and no profile among residents.
Equally unusual was Mr Zhou spending $68,200 of his own money on the campaign, according to a return filed with the NSW Electoral Commission, for a job on council which pays around $28,000 annually.
Huang’s Yuhu Group bought the Eastwood shopping centre for $55 million in 2013.
By comparison, the Liberals spent around $30,000 across six candidates in three wards.
“Why would you run for council if you don’t live in the area. I always thought that was a bit odd,” said Trenton Brown, a Liberal councillor.
“By its very nature, local government represents those who live in the area.
“If you don’t live there, I’m not sure why you would really care.”
And despite running as an independent, Mr Zhou had Mr Wong, who was still a NSW Labor upper house member at the time, officially open his electoral office last February.
On being elected the previous September, Mr Zhou told reporters he wanted to be “a true independent” and that party politics should not be present at the local level.
In addition to their mutual shareholding in the Pymble office complex, Mr Huang and Mr Zhou were connected through the Australian Council for the Promotion of Peaceful Reunification of China (ACPPRC), which has been described as a Communist Party organ.
Mr Huang was chairman of the Beijing-backed group and during his tenure, Mr Zhou was an executive vice-president.
Membership of the group put Mr Zhou firmly in the pro-Beijing camp, a position he made clear when the council moved an emergency declaration in June to support the Hong Kong protestors.
Mr Zhou voted against the declaration and then succeeded in watering it down at subsequent council meetings.
The long road to council approval
On the surface, Yuhu looked to have made some significant concessions to its initial development application for Eastwood Plaza, also known as the Eastwood Shopping Centre, after it was rejected by council in late 2016.
It cut the number of apartments in the complex by 34 to 409 while allocating five dwellings for affordable housing, up from none previously.
Renderings of proposed Eastwood Plaza upgrade, which adds a tower of apartments atop the older-style shopping centre in Eastwood.
But a closer look at the application shows the number of bedrooms in the complex actually increased by 44 to 784. This was done by slashing the number of one-bedroom apartments by 40 per cent, while tripling the number of higher value and higher margin three-bedroom dwellings.
The overall effect was to increase rather than decrease the number of people who could potentially live in the apartment complex.
As for social housing, the five apartments offered by Yuhu was 40 per cent below the recommended level, a point made by Greens councillor Christopher Gordon, who ultimately still supported the motion.
In addition Yuhu contributed $9.2 million for community infrastructure, up from $1.3 million previously. The project cost remained the same at $277 million.
Simon Zhou, left, with mentor and former NSW Labor upper house member Ernest Wong. Supplied
For six years, Mr Huang had struggled to win planning approval for the Eastwood site, amid community concerns around over-development in the area.
In an effort to bolster support for the project he used the shopping centre as a backdrop for donations to community and church groups, and when announcing a $1 million bequest for children’s cancer research and $1.8 million to set up the Australia-China Relations Institute (ACRI) at the University of Technology Sydney.
Despite these gestures, a development application for the site was knocked back by Ryde Council in late 2016.
It was a period during which Mr Huang’s business and political interests were coming together.
In June 2016, he reportedly cancelled a $400,000 donation to federal Labor after defence spokesman Stephen Conroy criticised Beijing’s actions in the South China Sea.
At the same time he wrote in The Global Times newspaper that Chinese donors “need to learn . . . how to have a more efficient combination between political requests and political donations”.
As Labor was scrambling to fill the $400,000 funding hole from Mr Huang’s cancelled donation, Mr Zhou suddenly emerged as a candidate on Labor’s NSW Senate ticket for the July 2 election, albeit in the unwinnable seventh position.
It would later emerge that in a six-week period from May 15 to July 1, six companies with links to Mr Zhou and an associate, Xudong “Chris” Wang, donated $305,000 to the ALP.
After running unsuccessfully for the Senate, Mr Zhou was hired as an adviser in the ALP’s NSW headquarters, even as his links to Mr Huang were formalised through his shareholding the Pymble Corporate Centre.
In December that year, Mr Zhou set up a company, Zwymble, in which he held 50.5 per cent of the shares. Chris Wang held another 16 per cent.
Mr Zhou’s wife was the sole director.
Six days later Zwymble became a shareholder in Mr Huang’s Austrump Times, the holding vehicle for the $82 million Pymble Corporate Centre deal. Zwymble’s 5 per cent share would be worth $4 million.
It is not clear how Mr Zhou paid for the stake – one of his companies had been hit with a $2.3 million tax bill two weeks earlier. It is not suggested there was anything improper about his stake in the company.
Labor ambitions scuttled
A year into his career at Labor head office, Mr Zhou was forced to resign when his links to China’s Communist Party and his involvement in a gold trading scandal were made public by The Sydney Morning Herald and The Age.
Unfazed, just two months later he was campaigning hard to win a seat on Ryde Council as an independent.
That same month his company Zwymble filed a notice with the corporate regulator that his wife had been replaced as sole director by Chris Wang’s wife, Yang Yang.
The Neighbourhood Teahouse runs a cafe in Mr Zhou’s electorate office.
The August 23 notice said Mr Zhou’s shares in Zwymble had been transferred to the company owned by his mother.
On December 11, 2017, a new ASIC filing showed Mr Zhou’s original shares in Zwymble, which had been transferred to his mother, had been transferred again.
The new owners were his business partner Chris Wang and his wife Yang Yang, who now had 66 per cent of the company. It’s not known what Mr Wang paid for the stake or whether Mr Zhou retains an interest in future profits from it.
“It was just a change of mind,” Mr Zhou said of selling the Zwymble shares to Mr Wang. “It was supposed to be an investment company but I was too busy to do it.”
Mr Wang and Mr Zhou regularly invest together, and maintain separate nearby offices in the Dymocks Building in Sydney city. In addition to Zwymble they currently have shared investments in two property companies and another new gold trading company.
The gold scandal that ended a Labor career
Their most recent shared investment was on August 14, the day when headlines reported Yuhu had finally won development approval for Eastwood Plaza.
Later that day, Mr Wang bought a half share in Neighbourhood Teahouse, a company owned by Mr Zhou’s mother and which runs a cafe in Mr Zhou’s electorate office.
“There was a potential for doing some distribution and importing and exporting goods, but it hasn’t started yet,” Mr Zhou told the Financial Review of the Neighbourhood Tea investment.
“Mr Wang told me he could get some popular tea and consumer-related products. To encourage people – of course, they want me to put some resources in. I had to give him some shares.”