CHINA

MINING TYCOON: is the first high-profile casualty in the widening investigation into former domestic security chief . REUTERS/STRINGER

China’s former domestic security chief tried to make a grab for power during the 2012 leadership transition, sources tell Reuters. The power struggle behind China’s corruption crackdown

BY BENJAMIN LIM, DAVID LAGUE AND CHARLIE ZHU

SPECIAL REPORT 1 THE POWER STRUGGLE BEHIND CHINA’S CORRUPTION CRACKDOWN

BEIJING/HONG KONG, MAY 23, 2014

iu Han seemed to thrive in the com- pany of officials. L Even a birthday party in 2011 for Liu’s primary-school aged son drew a crowd of bureaucrats in , the capital of China’s western prov- ince where the flamboyant mining tycoon was based. “There was a mayor of a nearby city with a population of three or four million,” recalls Australian political lobby- ist John Halden who helped win approval for Liu’s mining investments in Western Australia and was invited to the October 15 celebration. “There were senior people POWER PLAY: China’s leadership believes Zhou Yongkang was making a move to grab power in 2012. from the provincial treasury and about REUTERS/JASON LEE seven or eight officials from the city of Chengdu.” But Liu’s close ties with officialdom himself and people around him. Several didn’t last. When Chinese President Xi of Zhou’s men have been felled, including Jinping was named President at the end of $14.5 billion , briefly the top regulator of the annual parliamentary session in March state-owned enterprises, and former Vice The amount of assets seized from last year, the 48-year-old Liu was detained Zhou Yonkang’s family members Minister of Public Security Dongsheng. and surrounded by a different class of pub- Authorities seized assets worth at least lic servants; corruption investigators and and business associates. 90 billion yuan ($14.5 billion) from Zhou’s prison guards. family members and associates, two sources The billionaire head of the privately- Source: Reuters sources said. Liu’s assets were included in these held Sichuan Hanlong group of companies seizures. Ahead of his trial, the official PATRONAGE NETWORK is the first high-profile casualty of a power reported that authori- struggle wrapped in a corruption crackdown To get at Zhou, Xi last year began rolling ties had last year “seized and frozen enor- that is convulsing the senior echelons of the up the strongman’s extensive network of mous amounts assets of Liu Han and the ruling Communist Party. On Friday, a court patronage, assembled over more than four Hanlong group”. in central province sentenced Liu to decades in the oil industry, Sichuan pro- Zhou is the most senior leader targeted death after a sensational trial on charges of vincial politics and the internal security in a corruption probe since the Communists murder, gun-running, fraud, extortion, ille- services. More than 300 of Zhou’s relatives, took power in 1949. With the approval of gal gambling and a string of other offences. political allies, business associates, under- China’s two previous leaders, Hu Jintao and Liu had denied all the charges. lings and staff, have been arrested, detained Jiang Zemin, as well as other senior offi- Liu’s most serious offense, however, or questioned, according to people briefed cials, sources close to the leadership say, Xi could well be political: He was caught up on the investigation. Liu was one of them. broke with an unwritten rule that incum- on the wrong side of a titanic power play, Investigators have targeted the giant, bent and retired members of the Standing multiple sources say, because of his busi- state-owned China National Petroleum Committee were immune from corruption ness partnership with the son of former Corporation - where Zhou was once investigations. domestic security chief, Zhou Yongkang. general manager and Communist Party The Communist Party’s Central In a campaign unprecedented in modern Secretary - and its subsidiaries. Commission for Discipline Inspection, China, Xi is determined to bring down First, they detained six senior executives China’s top anti-corruption watchdog, and Zhou for making a behind-the-scenes grab from the oil giant late last year. Then, late the Ministry of Public Security declined for power, the sources say. last year, Xi launched a probe into Zhou Text continues on page 4

SPECIAL REPORT 2 THE POWER STRUGGLE BEHIND CHINA’S CORRUPTION CRACKDOWN

Closing in on Zhou’s circle A›er former domestic security chief Zhou Yongkang fell from grace, many of his aides and associates have been placed under investigation. He and his wife are currently under house arrest.

Family Political allies Sichuan business Oil industry Arrested, in custody and aides associates associates or charged

LI CHUNCHENG HUA BANGSONG Fmr. deputy party boss of Sichuan Chairman, Wison Engineering Services BO QILIANG Fmr. deputy governor of Sichuan Fmr. vice president, PetroChina

JI WENLIN WEN QINGSHAN Vice governor of Fmr. chief accountant, CNPC

LI DONGSHENG WEI ZHIGANG Fmr. Vice Minister for Fmr. head Indonesia Public Security operations, PetroChina LI CHONGXI WANG DAOFU Fmr. assistant to Zhou Fmr. chief geologist, PetroChina

LI GUANGYUAN RAN XINQUAN Chairman, Sichuan Fmr. vice president, Star Cable (SCS) PetroChina

SHEN LUDONG Managing director, SCS Fmr. deputy general manager, CNPC YANG PING Chief Financial OŠicer, SCS Fmr. vice president, CNPC HE YUYING‚ JIANG JIEMIN Fmr. executive, SCS Fmr. CNPC/PetroChina chaiman HE YAN JIN JIANPING Chairwoman, GoldTel Group Fmr. chairman, Jinran Public Utilities LIU HAN JIA XIAOYE ZHOU BIN Wife Fmr. Chinese mining Eldest son magnate with suspected links to Zhou Bin

Note: CNPC = China National Petroleum Corp. Ji worked as an aide for Zhou when the latter was land resources minister in the late 1990s. He then followed Zhou to Sichuan province and became one of his secretaries when Zhou was provincial party boss. Also former head of an advisory body to legislature in Sichuan. ‚ Died in September; the company did not provide a reason for her death. From a previous marriage. Source: Reuters.

SPECIAL REPORT 3 THE POWER STRUGGLE BEHIND CHINA’S CORRUPTION CRACKDOWN

to comment on the investigation when TIGERS AND FLIES: reached by telephone. The office of the Chinese President Xi Communist Party spokesman also declined Jinping launched a to comment when reached by telephone. corruption crackdown Although he retired in late 2012 from after taking power in the elite Politburo Standing Committee, November 2012, vowing the apex of political power in China, the to take down both 71-year-old Zhou wanted to rule from be- the high and the low. hind the scenes and had become a threat REUTERS/JASON LEE to leadership stability, according to multiple sources with leadership ties. One of Xi’s influential patrons, former vice president Zeng Qinghong, was the cat- alyst for the investigation into Zhou, three sources with ties to the leadership said. While there is little risk for Xi and his whether to put Zhou on public trial, accord- “Zeng proposed to central (authorities) supporters in taking down Liu, a similar ing to multiple sources with leadership ties. that Zhou Yongkang be investigated for move against someone as senior as Zhou Investigators want “to make it an iron- posing a political risk to the collective lead- Yongkang will take much more political clad case”, one of the sources said. If Zhou ership,” one of the sources said. courage. is charged, the authorities may avoid pub- Neither Zhou nor his representatives “If the leaders are using the corruption lishing detailed allegations to minimize any were available for comment. No evidence crackdown just to bring down their politi- damage to the Party’s image, the sources has emerged that Zhou or his relatives have cal rivals, there will be grim consequences, said. violated any Chinese laws or used Zhou’s as many officials in China are believed Zhou was last seen in public at an alumni influence to clinch deals. to have corruption problems,” says Zhao event at the China University of Petroleum Guangbin, managing director of in on Oct. 1. He has been under “TIGERS AND FLIES” and Toronto-based consulting firm,virtual house arrest since the investigation As part of his vision for a rejuvenated China, Gateway International Group. into his affairs began last year. Xi is preaching a return to the austerity of The government and state media have BUGGING LEADERS the Party’s early years. An attack on cor- not made any official statement about Zhou ruption is at the core of this campaign. Xi or the case against him. An announce- Zhou is believed to have orchestrated the pledges to go after “tigers and flies” in root- ment is expected around the fourth plenum bugging of senior Chinese leaders. At ing out wrongdoing. He warns that popular of the party’s elite 205-member Central Zhou’s behest, Beijing’s civilian intelligence disillusionment with rampant official graft Committee later this year, two sources said. chief Liang Ke ordered his most trusted threatens the Party’s hold on power. Xi and other top leaders have yet to decide men to bug the telephones of Premier Li

The beginning of the end Key events in the downfall of , his patron Zhou Yongkang and their associates

November 15, 2011 February 6, 2012 April 2012 May 2012 British businessman police chief Wang Bo is stripped of his posts Veteran Communist Neil Heywood dies in a Lijun flees to the U.S. consulate and his wife, , and Party members write Chongqing hotel room. in Chengdu, seeking asylum, an orderly are investigated in to President Hu Jintao, a€er accusing Bo Xilai’s wife connection with Heywood's asking him to sack of the Heywood murder. death. Zhou Yongkang.

SPECIAL REPORT 4 THE POWER STRUGGLE BEHIND CHINA’S CORRUPTION CRACKDOWN

Keqiang and his immediate predecessor, Wen Jiabao, their families and aides in the run-up to the party’s 18th congress in 2012, said one source close to the current lead- ership and another who has been briefed about the surveillance. The eavesdropping was aimed at “look- ing for evidence of (any) corruption”, one source said. It was unclear how the au- thorities discovered the bugging. Liang was taken into police custody this year and is himself undergoing investigation for corruption. Further alienating Xi and other top leaders, Zhou backed the now disgraced DISGRACED: Bo Xilai, the once high-flying Politburo member and Chongqing governor, is serving a Bo Xilai to join the Politburo Standing life sentence for corruption and abuse of power. REUTERS/HANDOUT Committee in the run-up to the 2012 Communist Party conference that would install a new leadership. The charismatic him as domestic security chief and tried to Yongkang wanted to be Cixi’,” a third Bo, who was the former Party boss of orchestrate the younger man’s promotion to source said, referring to the empress dowa- Chongqing in Sichuan province, would the Standing Committee, the sources with ger of China’s last imperial dynasty who have been beholden to Zhou (himself a leadership ties said. ruled from behind the scenes. former Sichuan Party chief ) and a power- But Bo’s rise was aborted in 2012 by the Zhou and Bo also toyed with the idea of ful rival to Xi had he succeeded in reaching attempted defection of his Chongqing po- Bo becoming premier and ranked number the top level. lice chief, , to the U.S. Consulate three in the Standing Committee behind At the peak of his influence, Zhou in Sichuan province. After apparently aban- President Xi and Li Keqiang, who would Yongkang held one of the most powerful doning his bid for asylum, Wang implicat- have been kicked upstairs and made head positions in China. As domestic security ed Bo’s wife in the 2011 murder of British of parliament, three sources with ties to the chief, he oversaw the police force, the civil- businessman, Neil Heywood. Bo’s wife and leadership said. ian intelligence apparatus, the paramilitary his former police chief have been convicted This scenario never played out. But the People’s Armed Police, judges and prosecu- and jailed. Bo himself was sentenced to life leadership was shocked when it learned tors. During his five-year watch, the budget in prison last year for corruption and abuse about the alleged plot, the sources said. It for maintaining internal stability exceeded of power. was unclear how it was uncovered. “This the public figure for military spending. The would have overturned the 17th congress PREMIER BO? position, deemed too powerful, was down- resolution,” one source told Reuters, re- graded after he retired. Zhou had envisioned himself as the pow- ferring to an unpublicised decision made To ensure his influence past retirement, er behind the throne in retirement if and at the party’s five-yearly conclave in 2007 Zhou had nominated Bo Xilai to succeed when Bo took over, the sources said. “Zhou to make Li premier. “It would have been

November 15, 2012 January 24, 2013 March 2013 July 25, 2013 takes over Xi promises a high-profile Mining tycoon, Liu Han, Bo is charged with leadership of the Communist corruption crackdown a family friend of the corruption, bribery and Party and the Central Military that targets high-ranking Zhous, is arrested for abuse of power. He was Commission. “tigers” as well as “flies”. harboring a wanted later found guilty and fugitive. sentenced to life.

SPECIAL REPORT 5 THE POWER STRUGGLE BEHIND CHINA’S CORRUPTION CRACKDOWN

tantamount to a palace coup,” a second Sichuan. This has not been independently source said. confirmed. Reports in China’s domestic Zhou also attempted to gain influence media have noted that the rise of Liu Han’s over a top aide to then President Hu Jintao, business empire coincided with Zhou , three sources said. Ling’s son, Yongkang’s posting as Sichuan Party secre- Ling Gu, aged in his 20s, was killed driv- tary from 1999 to 2002. ing a Ferrari in Beijing on March 18, 2012. Without mentioning Zhou Yongkang, One young woman was also killed and an- Zhou Bin or the wider crackdown, the other injured. Soon after the crash, a Zhou authorities in February acknowledged the ally, Jiang Jiemin, then chairman of state- probe into Liu was driven from the top. A owned oil giant China National Petroleum 10-month investigation “under the strong Corp (CNPC), sought to buy the silence of leadership of the central committee of the the dead victim’s bereaved family and the Communist Party” had solved Liu’s case, surviving passenger, the sources said. the official Xinhua news agency reported “Millions (of yuan) were paid,” a third on February 20. source said. “When (President) Hu Jintao PETRO-PURGE: Six top executives at China’s AUSTRALIAN MINES found out, he was very disappointed.” Jiang National Petroleum Corp and its subsidiary used CNPC funds to make the payments, PetroChina (whose logo is above) have been Liu set up Sichuan Hanlong in 1997. With sources said. Ling Jihua has been demoted detained in the corruption investigation his younger brother, Liu Wei, the pair built to head a low-level ministry for attempt- surrounding the company’s former general a fortune from building materials, con- ing to cover up the crash. He could not be manager and domestic security chief, Zhou struction and property, according to reports reached for comment. Jiang Jiemin was Yongkang. REUTERS/KIM KYUNG-HOON. in the official media and interviews with briefly elevated to be the top regulator of former employees. China’s state-owned enterprises, but was He also had global ambitions. In 2009, sacked soon afterwards. He is now in cus- authorities, Zhou Bin returned to China Hanlong made its first major offshore in- tody on suspicion of corruption, sources say. via Singapore later in the year, the source vestment, taking a $200 million control- Zhou Yongkang’s son Zhou Bin, who said, adding that he has been detained and ling stake in Perth-based Moly Mines, a has business interests in the energy sector, investigated for corruption and his links to company planning to develop one of the is also a key target of the corruption probe. gangsters. It has not been possible to reach world’s biggest molybdenum deposits in In a sign of Zhou Yongkang’s lingering Zhou Bin for comment. West Australia’s Pilbara region. The com- influence in the security apparatus, Zhou From Zhou Bin, the investigation led to pany also paid $40 million for a stake in Bin eluded a warrant for his arrest and fled Liu Han. Two sources briefed on the in- another molybdenum play, Colorado-based to the United States early last year after vestigation said the younger Zhou and Liu General Moly Inc. receiving a tip-off from an ally, said one were business partners. They gave no fur- Hanlong also took stakes in two other source with direct knowledge of the mat- ther details but the well-connected Chinese Perth-based miners, Marenica Energy, ter. “Central (authorities) were shocked and magazine Caixin reported in February that which has rights to a uranium deposit in angry”, the source said. Liu and Zhou Bin had worked together on Namibia, and Sundance Resources Ltd, After negotiations with Chinese deals in power generation and tourism in which has extensive iron ore deposits

December 2013 March 2014 April 29, 2014 China puts Zhou under China seizes at least $14.5 China says it will charge , virtual house arrest as it billion worth of assets from deputy party secretary of Sichuan province launches a corruption Zhou’s family members and and key Zhou ally, a­er an investigation investigation against him. associates, Reuters reports. found him guilty of bribery and engaging Liu’s trial begins on March 31. in “superstitious and feudal activities”.

SPECIAL REPORT 6 THE POWER STRUGGLE BEHIND CHINA’S CORRUPTION CRACKDOWN

straddling the border of Cameroon and XI’S PATRON: Former Congo. Hanlong eventually had 12,000 Vice President Zeng employees worldwide and annual revenues Qinghong (R) handed of $2.5 billion, according to statements on the position over to his the websites of its listed companies. It is protege, Xi Jinping in unclear how the confiscation of Liu’s assets March 2008. REUTERS/ has affected his stakes in Chinese and over- JASON LEE seas companies. Hanlong Vice President Kang Huanjun declined to answer ques- tions about the company . “Thanks but I’m not able to make any comment,” he said when called on his mobile phone. Former managers, staff and colleagues say the chain-smoking Liu made no secret of his love for expensive cars, banquets, fine had stakes in 70 companies and had ac- questioned as part of the investigation say- French wines and heavy gambling. “All cumulated assets worth almost 40 billion ing the tycoon had close ties with senior the meetings we had with him were pretty yuan ($6.4 billion), according to the offi- provincial and Beijing officials. Former short, just one or two hours,” says Collis cial coverage of his arraignment and trial, Hanlong group executives and advisors say Thorp, former chief operating officer at which was closed to the public. it was clear that Liu enjoyed close ties with Moly Mines. “He was most interested in Ahead of his trial, state-run television senior government and party officials. heading out to the local casino.” broadcast an interview with his wife Yang, Visibly distressed and in tears at stages Aside from his business success and ex- dressed in what appeared to be prison of his trial, Liu seemed to understand at the travagance, Liu was known for his philan- garb, where she described how Liu paid time that he would be lucky to avoid the thropy, particularly to help victims of the off government officials. “He would take death sentence. As Yang was escorted from devastating Sichuan earthquake in 2008. me to dinner with them and during din- the court after giving evidence in a televised He also appeared to be a dedicated fam- ner he would give them lots of gold, jade segment towards the end of his trial, a sob- ily man. On his regular visits to Australia, and other precious gifts worth several hun- bing Liu called out to her. “Look after the Liu sometimes travelled with his attractive, dred thousand to millions of yuan,” Yang children,” he cried, “look after my mother.” 37-year-old wife, Yang Xue, and their two said. “Sometimes he bribed them through Yang promised she would. young children, a boy aged about 10 and a gambling.” The pair appear to have been girl slightly younger, according to former divorced since Liu was detained because Editing by Bill Tarrant staff members and advisors who met the Yang was described as his former wife in family. this interview and another televised excerpt FOR MORE INFORMATION An entirely different picture of Liu of the trial carried on state television. Benjamin Lim, North Asia Specialist emerged before and during his 20-day trial While Liu Han insists he is innocent, Correspondent in the central province of Hubei, which his brother Liu Wei has pleaded guilty and [email protected] ended on April 19, according to lurid re- told the court he was ready to accept pun- David Lague, Greater China Enterprise ports in the state-controlled media. ishment for his crimes. Liu Wei, also known Editor Far from a benevolent high-roller, Liu as Liu Yong, was also sentenced to death by [email protected] was portrayed as a violent and ruthless the court in Hubei on Friday. Another 34 Charlie Zhu, Asia energy companies crime boss. He and his brother were ac- defendants in the case were given sentences correspondent cused of leading a gang responsible for ranging from 11 years in prison to death, [email protected] nine murders, multiple assaults, harbouring Xinhua news agency said. Bill Tarrant, Enterprise Editor criminals, obstruction of justice, loan fraud, Only three relatively junior officials [email protected] kidnap and contract rigging. from Sichuan were tried alongside Liu. Michael Williams, Global Enterprise Editor At the time he was detained, his gang But Xinhua reports have quoted witnesses [email protected]

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SPECIAL REPORT 7 THE POWER STRUGGLE BEHIND CHINA’S CORRUPTION CRACKDOWN

Big spender, philanthropist and warlord

PERTH/HONG KONG advisors say they assumed the failed hit BY DAVID LAGUE AND CHARLIE ZHU explained why the Chinese tycoon always traveled with a bodyguard. Former managers and staff at Liu Han’s Australian operations were dumbfounded BIG SPENDER when the Chinese tycoon went on trial last With Hanlong in control of Moly Mines and month for leading a murderous, mafia-style looking for more investment targets, Liu gang. was a regular visitor to Perth and other state In 2009 when Liu, 48, launched a bid to capitals. take control of Moly Mines, executives then To his local staff, the head of the biggest running the Perth-based company ordered privately held group in Sichuan appeared background checks. Their findings could to be a stereotype of a cashed-up mainland not have been more different: Liu was best tycoon - one former employee noted a known in China as a philanthropist in his diamond-encrusted, custom-made Franck native Sichuan province. Muller watch on his wrist. One story stood out. Amid the When Liu entertained, he routinely devastation near the epicentre of the 2008 ordered the most expensive French wines, Sichuan earthquake, a school Liu had spending more than $12,000 on a bottle of helped build remained standing and all FAST LIVING: Liu Han was know in Australia for wine in Sydney, according to former staff. of its students had escaped unharmed. his love of fast cars, expensive wines and casinos. One former manager recalls Liu spending In contrast, many other shoddily built REUTERS/STRINGER $100,000 on wine in one meal. classrooms, so-called “tofu schools”, had And, he was passionate about cars. Liu collapsed, killing thousands of children. Liu boasted that he had a fleet of 80 luxury also donated generously to reconstruction commodity. Liu said he could arrange vehicles, according to staff from his Chinese and relief efforts. financing from Chinese banks to build and and Australian companies. A former For Moly Mines, Liu’s philanthropy operate mines on the deposit. executive at one of Liu’s companies said the enhanced his credibility as an investor in Neither Moly Mines nor Australian tycoon owned a Lamborghini SuperVeloce Australia. “No one said he was a criminal”, regulators say they turned up any findings China, a limited edition sports car specially says Collis Thorp, then chief operating officer about Liu that would threaten the deal. designed for wealthy Chinese buyers with a of Moly Mines and a veteran of Western In late 2009, Liu’s privately-held Sichuan distinctive orange stripe through the middle Australia’s booming mineral sector. Hanlong Group won approval from the of the body. After opening negotiations with Liu, the Australian government, paying $140 Liu’s greatest passion was gambling, his Australian executives also learned he had million for 52 per cent of Moly Mines and Australian and Chinese staff say, staying at global ambitions. Liu wanted Moly Mines providing the company with a $60 million the tables until dawn and then sleeping until to become the platform for an international loan. Hanlong also pledged to secure $500 mid-day. He was a regular at Crown casinos commodity trading house. The company was million in funding to develop the deposit. in Perth and Melbourne. He sometimes sitting on a massive molybdenum deposit, For Moly executives, one unnerving complained when he lost heavily, but thought to be the second biggest in the fact did emerge from Liu’s past: someone always claimed he recovered his losses on world, in Western Australia’s mineral rich had tried to kill him. In 1997, Liu narrowly subsequent visits. In Perth, he often stayed in Pilbara region. escaped an assassination attempt in his Crown’s presidential suite, former staff and Molybdenum provides strength, heat hometown of when a gunman advisors say. tolerance and corrosion resistance in a range fired two shots at him but missed, according At his trial, Liu admitted losing $128 of specialized steel alloys for industrial to reports in the official media of court cases million in Macau, $15 million in the United and military use and is seen as a strategic in China. Liu’s Australian managers and States, $9 million in Singapore and about $1

SPECIAL REPORT 8 THE POWER STRUGGLE BEHIND CHINA’S CORRUPTION CRACKDOWN

million in Australia, according to prosecutors. “I was unwilling to leave gambling tables, either when I was winning or losing money,” Liu testified, according to official reports of his trial. “If I win, I want to win more. If I lose, I want to recover my losses. I would only leave when I lost all my chips.” Australian executives who visited him on business trips to Chengdu, where the Hanlong group has its headquarters, and other cities in China, say Liu’s routine typically involved short meetings followed by long lunches or dinners in private rooms at restaurants or hotels. “There would be lots of people running around and lots of courses,” says John MINING COUNTRY: In 2009, Liu bought Australia’s Moly Mines which has one of the world’s biggest McEvoy, Moly Mines’ former chief financial deposits of molybdenum and is located in the Pilbara mining region of Western Australia. officer, who traveled in China with Liu. REUTERS/DAVID GRAY To former Moly Mines staffer, mainland- born Xu Chuanmei, Liu appeared to be intelligent, well-educated and avoided In an affidavit filed in the Supreme Court trades and cooperate with the investigation business jargon in his Sichuan-accented of New South Wales ahead of his sentencing, into other Hanlong Mining executives. Chinese. Liu speaks little or no English and Zhu said shortly after he joined Hanlong Zhu pleaded guilty to trading shares and always used an interpreter while overseas. Mining in 2010, fellow executives had derivatives in the Sundance and Bannerman “He likes to put things in a simple way,” described Liu Han as a “warlord”. bids. He also pleaded guilty to insider trading she says, adding that Liu often travelled “In Chinese culture, that means Liu Han is during stints with two earlier employers. Zhu with his own supplies of Sichuan food and a powerful business person; he is successful admitted he made more than $370,000 condiments. in business, politics and the underworld,” in profit from insider dealing. Gains from Eventually, Liu’s plans for Moly Mines were Zhu said in his affidavit. the Sundance and Bannerman trades were frustrated as stubbornly low molybdenum Being part of Liu Han’s executive team transferred to Hong Kong bank accounts. prices undermined the viability of the gave Zhu entrée to a high-flying lifestyle of In his affidavit, he said Liu Han had company’s deposit. Most of the executive business or first class air travel, top hotels assistants in Australia who had connections team at the company when Hanlong took and the best restaurants. In Hong Kong, with underground figures linked to casinos control have since left or been replaced. he and colleagues stayed at VIP rooms at and loan sharks. Zhu said he hoped that the Hong Kong’s Shangri-La Hotel and the Ritz Sundance takeover bid succeeded so that Liu THE WARLORD Carlton in Beijing, he said in his affidavit. would not be so angry with him. “As long as A more equivocal picture of the Chinese “Although everything was paid by Hanlong, I I do not get Han Liu into any trouble, I do not tycoon began to emerge after Liu made felt money was no object,” he said. “I wielded think he will come after me,” he said in his takeover bids for two other Perth-based money and power and I felt like I was really affidavit. companies, Sundance Resources and starting to become somebody important.” Zhu needn’t have worried about his Bannerman Mining. The Australian With a fellow executive, Zhu regularly safety. Within a month of the Australian Securities and Investments Commission, spent over $3,000 a day on food and drink, he starting his sentence, Liu Han himself was Australia’s corporate regulator, investigated said. While in Beijing, a colleague bought two in custody. On Friday, a court in China’s executives at Liu’s Australian subsidiary, luxury cars for them to drive, an Audi Q7 and central Hubei province was sentenced to Hanlong Mining Investment, for insider an Audi S5. “We were always chauffeured in death after a sensational trial on charges of trading linked to the failed bids. One of the Mercedes’, Range Rovers and sometimes in murder, gun-running, fraud, extortion, illegal executives, Calvin Zhu Boshi, a Shanghai- Rolls Royces,” Zhu said in his affidavit. gambling and a string of other offences. born Australian citizen, pleaded guilty and in However, Zhu began to fear for his February last year was jailed for 15 months. safety when he decided to confess to illegal Editing by Bill Tarrant

SPECIAL REPORT 9