Huang Xiangmo’s mystery $1.2b man

Huang Xiangmo’s mystery $1.2b man


And he’s still buying houses.

Remarkable rise

It’s heady stuff for a man who just over two years ago was living in a $1 million apartment he bought with a mortgage out at Wolli Creek, a suburb with a view of Sydney Airport rather than Middle Harbour.

Zhang has risen without trace. He’s an Australian resident, which begs the question: where does his financial support come from?

Media reports regularly describe him as having major assets in New Zealand, butAFRWeekendcould find no evidence of this.

He’s clearly a man with powerful friends, andAFR Weekend can reveal that these include current and former executives of China’s second-largest property group, Evergrande.

Carina

While ubiquitous in Southern China, Evergrande is best known in Australia due to its chairman, Xu Jiayin, who wasfamously forced to sell a $39 million Point Piper mansionby then treasurer Joe Hockey in 2015 after he was deemed to have purchased it illegally.

Xu, China’s second-richest man with a fortune estimated at more than $50 billion, was given 90 days to offload the waterfront house in Sydney.

It left a black mark with the Foreign Investment Review Board (FIRB) and Evergrande has made no further investment applications.

Yuhu dismisses any link between Evergrande and either Huang or Zhang. It says Zhang’s backers are private investors who also have shareholdings in Evergrande. More on that later.

The mystery that surrounds Zhang begins with the basic question: where is he?

He’s a billionaire without an office. His various filings with Australia’s corporate regulator give several addresses for where he lives, but they’re all in Beauty Point. And that’s an area from which he seemed conspicuously absent this week.

There’s the $6.2 million house in Beauty Point Road that one of his companies bought in June 2017.

A tradesman working on the house was the only sign of life whenAFR Weekend visited.

“The owner is here, maybe once a year,” the tradesman said during his lunch break.

The Euryalus Street mansion that another Zhang company bought in August 2017 for $8 million was also empty.

The painter working on site said, “I think Bo Zhang owns it but he does not live here.”

Then there’s Tivoli Street. Zhang bought there for $5.3 million in January 2018 but it’s different from his other houses, all of which were bought for cash. This street is less prestigious, the title is under his own name, and he paid for it with a Westpac mortgage.

A young woman in pyjamas at the house says, “Maybe he owns the house but he does not live here.”

Across at Bay Street, where his company paid $7.65 million in October last year, the only resident is a young man of about 25.

“Most of the time it’s empty,” he said. “I’m a friend of a friend, staying for a few weeks.”

Four doors along, the house Zhang bought last May for $6.6 million is vacant with an empty garage and pile of uncollected mail.

Cuilam (Australia) Investment

Further along Bay Street is the little house Zhang bought from Huang Xiangmo’s daughter Carina on October 21 for $3.075 million. It’s empty as well.

Origin story

Zhang began his Beauty Point spending spree just 20 months after he bought that apartment at Wolli Creek for $1.07 million, with a mortgage.

Zhang didn’t respond to questions fromAFR Weekend.

A Yuhu employee says people often ask if there are links between Yuhu and Evergrande, perhaps because they are both based in Shenzhen.

But the links go a little deeper than that.

Last month theTax Office moved to freeze Huang’s assetsover an unpaid bill for $140.9 million. Much of that debt relates to a building project in Shenzhen, the Nanyou Mansion Refurbishment, which Huang sold to an Evergrande company in mid-2014.

But Yuhu did not announce this sale for at least six months. As the development approval was secured and the existing building demolished, there was no public sign that Evergrande was the ultimate owner.

Yuhu says government authorities were fully aware of the ownership status.

It was shortly after the Nanyou sale, in October 2014, that Evergrande’s Xu Jiayin flew in to Sydney on the company’s Airbus A319 to make his ill-fated purchase of Villa del Mare in Point Piper, only to be a forced seller the following year.

Meanwhile, Huang was by 2016 looking at new property deals as Zhang busied himself setting up companies.

In late 2016, Zhang set up two companies: Cuilam (Australia) and Cuilam (Australia) Investment.

The names suggested both of Zhang’s new companies were linked to a New Zealand dairy group with connections to Evergrande in China.

In fact, that New Zealand company has no connection at all with Zhang’s Australian companies, which have been buying up development sites and Mosman property.

Zhang does, however, have Evergrande connections in Australia.

Wang Zhongming, a vice-president of Evergrande’s Real Estate Group and chairman of its Shenzhen Construction Group, held 30 per cent of Cuilam (Australia) Investment before his shares were transferred to Zhang.

It was this company, Cuilam (Australia) Investment, that took a 45 per cent stake in a deal Huang put together in late 2016 to buy the Pymble Corporate Centre on Sydney’s upper north shore for $82 million.

Huang took 50 per cent, with another five per cent stake going to a company then owned by Simon Zhou, now the Deputy Mayor on Ryde Council in Sydney’s north-west.

Joe Hockey

On Wednesday,TheAustralian Financial Reviewrevealed that planning approvalfor Eastwood Plaza granted by the Ryde council is set to deliver Huang a potential $135 million windfall.

While the Ryde councillor, Zhou, did not directly benefit from the Eastwood decision, he didn’t declare his financial links with Huang, held through the Pymble Corporate Centre.

That is a potential breach of the Local Government Act, while the council’s decision to grant planning approval to Huang’s Yuhu Group has beenreferred to the NSW corruption watchdog.

Pymble shareholding aside, the Mosman home owner Zhang has no connection with the Ryde councillor Zhou.

After Pymble, Huang’s next deal was to buy the Bakehouse Quarter, a retail site based around the old Arnott’s Biscuits factory in Sydney’s inner west, for $380 million.

Evergrande’s Wang Zhongming was a director of the Huang company that was buying the Bakehouse precinct under a long-dated option deal.

A 40 per cent stake in this company was held by a Hong Kong entity, which shares the same address that appears for the Evergrande executive, Wang Zhongming, in the Panama Papers.

Deals overshadowed

While not insignificant, the Bakehouse and Pymble deals were overshadowed by the2017 crisis which engulfed Chinese developer, Dalian Wanda.

New Zealand company

Xu Jiayin, chairman of Evergrande Group, was forced to sell his Port Piper mansion. Che Liang

Yuhu was the public face of a deal in Australia which helped Wanda and its high-profile founder shed assets.

The crisis began when Chinese regulators put Wanda on a watch list due to its string of highly leveraged deals around the world. Wanda was forced to dump $US25 billion of assets and reduce a debt pile authorities in Beijing worried may become a systemic risk to the broader economy.

This firesale included Wanda’s flagship sites on Sydney’s Circular Quay and the Gold Coast.

In an extended series of negotiations that lasted until May 2018, Huang agreed to buy both assets – in partnership with Zhang.

This time it was a new company, Dachang Australia, which would take a half share in the properties at a cost of $565 million, with Yuhu taking the other half.

Zhang owns 88 per cent of Dachang, with 12 per cent held by Weimin Wang (the New Zealand owner of Cuilam Industry, who has links to Evergrande as a director of one of its subsidiaries and through cross-shareholdings).

Huang has been reported to say that neither he nor his son, Jimmy, were the actual buyers of the Wanda properties but were instead acting for others. The position isn’t clear.

Whatever the arrangement was, the deal came unstuck last December when Huang’s Australian residency visa was cancelled on advice from ASIO, amid concerns about foreign interference in the Australian political system.

The investors in the Bakehouse deal pulled out, leaving Huang’s son Jimmy as sole buyer when it finally settled last April.

At this point, the Circular Quay and Gold Coast assets had become too hard for Yuhu and Huang needed an escape strategy.

While Yuhu says it will continue to oversee construction of both projects, on December 20, two weeks after Huang’s visa was revoked, it had agreed to transfer its half share.

The buyer? Once again Zhang, the $1.2 billion man, stepped up.

His companies ponied up another $565 million to buy out the Circular Quay and Gold Coast properties in a deal finalised on May 15.

That left Zhang free to keep doing what he does best – house shopping.

On May 24, a new Zhang company, GT Australia Investment – which has no FIRB problems because Zhang owns 81 per cent –shelled out $6.6 million for a house in Bay Street, Mosman.

It was another cash sale. Sometimes you can’t get enough of those water views.

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