Late MCA leader accused of stealing A$20m from Aussie firm
KUALA LUMPUR, May 30 — Datuk Tan Tiong Hong, a former MCA secretary-general and Deputy Finance Minister who died last year, is alleged to have taken more than A$20 million (RM62 million) from a public-listed company in Australia to repay a personal debt, the Sydney Morning Herald reported today.
The Australian newspaper report also suggested that Putrajaya’s ties with Canberra may be tested again if Australia’s securities regulator, the Australian Securities and Investments Commission (ASIC), goes after the family of Tan to recover the money.
Tan, the founder and former executive chairman of Australian-based finance company Zheng He Global Capital, is alleged to have abused his position to organise “secret” loans totalling 136.79 million yuan (RM68 million) to 10 companies linked to fellow Zheng He director, Rong Cheng Wei, the newspaper reported.
Zheng He owns Fujian Zhong Hong, the sole wholly-owned foreign corporation that is allowed to run a credit guarantee business in China’s Fujian province until 2048.
Its operations cover Malaysia, Singapore, Hong Kong and Australia, where it was listed on the Australian Securities Exchange (ASX) in 2010. It has now been suspended.
Andrew Smith, who took over as Zheng He’s acting chairman when Tan died exactly one year ago today, has sent letters of demand to the former MCA strongman’s estate here, which still holds the controlling share in the company.
The daily said that Smith “believes the loans were designed to use the public company’s cash to repay US$18.8 million (RM56.4 million) borrowed by Tan from Wei in April 2010 to facilitate Zheng He’s public float”.
SMH said that Tan’s widow, Catherine, had used her family’s 55.3 per cent majority stake in Zheng He to press the appointment of four new directors to its existing three-member board and Smith had been forced to agree to the demand yesterday even as he provided the ASIC with details of the events within the company.
“It will be interesting to see whether they decide to continue legal action against the Tans. [An] Insider suspects investors in Zheng He can kiss that money, and probably their investments, goodbye,” the Australian daily said.
“ASIC’s difficulty is going to be that while Zheng He is in Australia, the business that made the loans is in China, the accused ‘thief’ is now dead, and the other former director said to be involved in the suspect loans, Wei, is also in China,” it said.
The daily said that the firm’s woes were not only financial but suggested that there could be political fallout between the two countries over the scandal.
“The political thorn for ASIC’s chairman, Greg Medcraft, will be that Tan was a respected leader of the Malaysian Chinese Association (MCA) political party, and served as a deputy finance minister and deputy minister in the Prime Minister’s office under former Malaysian strongman Dr Mahathir Mohamad. Mahathir and his wife attended the funeral,” it said.
Earlier this month, Malaysia-Australia relations were strained after two local dailies published misleading reports portraying Australian senator Nicholas Xenophon as anti-Muslim following the latter’s remarks on the April 28 Bersih rally for electoral reform.
Xenophon has told The Malaysian Insider he will sue the New Straits Times (NST), accusing the Umno-controlled Malaysian daily of jeopardising his safety by publishing an article portraying him as anti-Islam even after it issued a swift apology for the error.