The Chinese owner of the Port of Darwin lease is using the port as security to seek a loan of up to $500 million from the Chinese government’s trade bank.
Landbridge Industry Australia, a privately owned Chinese company, is seeking the loan from the Chinese government’s Export-Import Bank (Exim) to prop up the firm’s struggling Australian operations. The company is paying an $880,000 yearly consulting fee to former trade minister Andrew Robb.
The revelation of the firm’s dealings with Exim raises fresh questions about Landbridge’s Chinese Communist Party ties and what happens in the event of a loan default.
The Northern Territory government told Fairfax Media that it had been briefed by Landbridge on its efforts to secure funding from Exim. A government spokeswoman said the NT had the power to retain control of the port in the event of a loan default and that the Foreign Investment Review Board could also step in.
The prospective Exim loan also suggests that the former Australian trade minister’s $73,000 monthly consulting payment (including GST) from Landbridge may be indirectly funded by the Chinese government’s trade bank.
New details have emerged about Mr Robb’s confidential consulting agreement with Landbridge. The agreement states that Mr Robb will be paid to act as a consultant via a company called “Andrew Robb Pty Ltd” from July 1, 2016.
Mr Robb has declined to answer specific questions about when he negotiated his consulting deal with Landbridge and what work he has provided.
Landbridge head Ye Cheng, Prime Minister Malcolm Turnbull and then trade envoy Andrew Robb in Beijing in April 2016. Three months later, Mr Robb was on Landbridge’s payroll. Photo: Landbridge
Mr Robb’s consulting deal with Landbridge is one of several relationships between large Chinese companies and Australian ex-politicians that have been scrutinised by Australia’s security services, who are concerned that Beijing may be trying to exert influence in Australia via a small number of Chinese firms.
Efforts by the Chinese Communist Party to exert influence in Australia have become the subject of intense debate in Canberra, following a joint Fairfax Media and Four Corners investigation into Beijing’s foreign interference campaign.
On Wednesday, Attorney General George Brandis said he was “leading reform to our espionage and foreign interference and bribery laws to ensure that the kind of behaviour that the Four Corners program reported is properly dealt with by our criminal law”.
“I’ve asked my officials with whom I’ve been meeting as recently as this morning to come back with a comprehensive body of reforms learning from, for example, the American criminal law about foreign interference and subversion.” Mr Brandis said “comprehensive reform of espionage and foreign interference law in Australia… will be introduced into the Parliament later this year.”
Fairfax Media and the ABC have confirmed that Darwin port lessee Landbridge Infrastructure Australia has had confidential discussions with officials from EXIM bank about securing a $500 million loan.
The state-owned bank is under the direct control of the Chinese government’s state council. Its mandate includes promoting Beijing’s policy objectives, including the “One Belt One Road” infrastructure and trade policy.
It’s understood Exim officials have visited the Darwin port, while the Northern Territory government has confirmed in a statement that Landbridge has briefed it on its dealings with Exim.
“Decisions relating to program funding are commercial decisions for Landbridge, however the NT Government is aware that Landbridge has considered third party finance options, including approaches to a range of Australian and Chinese banks (including Exim),” the NT government statement said.
Landbridge said in a statement: “Landbridge is investigating a range of commercial funding options for Darwin Port including both domestic Australian and Chinese banks. The Northern Territory government is fully aware of and supportive of these discussions.”
Landbridge, which is owned by Chinese billionaire Ye Cheng, is seeking funds to plug a significant shortfall estimated at around $500 million to build a luxury hotel and business park in Darwin.
The port lease is among Landbridge’s few valuable assets in Australia and it is understood Exim has been examining detailed financial information about the port’s operation. Exim officials have also travelled to the port. In May, Landbridge’s other major Australian asset, resource company Westside, reported a $6.65 million loss in the 2015-16 financial year.
Mr Ye’s purchase of the 99-year lease of the Port of Darwin in 2015 for $506 million sparked a major controversy after US President Barack Obama complained he hadn’t been forewarned of the acquisition of the port, which is near a US marine hub.
At the time, Landbridge and the Northern Territory government dismissed the concerns and stressed that Landbridge was a private company not controlled by the Chinese Communist Party.
The defence department and ASIO said at the time the port acquisition raised no national security concerns. But the director of the Australian Strategic Policy Institute, Peter Jennings, insists the port deal may benefit Beijing’s long-term strategic interests that do not necessarily align with Australian interests.
Mr Ye frames much of his business activity in terms of promoting Beijing’s ‘One Belt, One Road’ policy.
During a December 2015 hearing before the senate Economic Reference Committee, Landbridge’s senior Australian executive, Mike Hughes, told Coalition senator Matt Canavan he did not know if the company’s debt belonged to state-owned or private banks.
During this hearing, Mr Hughes downplayed Mr Ye’s close Chinese Communist Party ties. He compared Mr Ye’s membership of a Communist Party advisory group called a Peoples’ Political Consultative Conference [CPPCC] to an Australian businessman belonging to a federal government advisory body.
“It is not unlike committees that exist in Australia,” Mr Hughes said.
Chinese president Ji Xinping has described the CPPC’s work as promoting the Communist Party’s leaders “without wavering.”
“To do the CPPCC work well, we must uphold the CPC [Chinese Communist Party] leadership… the CPPCC is the broadest patriotic united front organisation. The united front is an important magic weapon of the CPC for winning victories in revolution, construction, and reform, as well as an important magic weapon for realising the Chinese nation’s great rejuvenation,” President Xi said in 2014.
By Nick McKenzie, Richard Baker
Sydney Morning Herald