INSIDER
Australia's family with Malaysia might be tested once again if the corporate watchdog pursues claims that a one-time Malaysian supervision minister, Dato Tan Tian Hong, took more than $20 million from an ASX-listed firm to pay back a personal debt.
The right away suspended, China-based credit pledge firm Zheng He Global Capital told shareholders this week that Tan, who died final year, used his location as senior manager chairperson to organize secret 136.79 million yuan ($21 million) loans to 10 companies related with associate Zheng He director, Rong Cheng Wei.
Zheng He's behaving chairman, Andrew Smith, who has outlayed this year perplexing to dis-tangle what happened, believes the loans were written to use the open company's money to pay back $US18.8 million borrowed by Tan from Wei in April 2010 to make easy Zheng He's open float.
Tan might be out of reach, but Smith has sent letters of urge to his defunct estate in Malaysia.
Fascinatingly, about the same time as Smith's lawyers were diagram up those demands, Tan's widow, Catherine, used her family's 55.3 per cent shareholding in Zheng He to urge the appointment of 4 new directors to the board.
With no hope of violence that house challenge, Smith yesterday afternoon arched to the unavoidable and convened a house meeting, similar to the new appointments.
It will be engaging to see either they confirm to go on authorised action against the Tans. Insider suspects investors in Zheng He can lick that money, and probably their investments, goodbye.
Smith, though, might have paid for them a few insurance. Insider hears he met member of the Australian Securities and Investments Commission yesterday and supposing them with a minute record on all the events.
ASIC's burden is going to be that whilst Zheng He is in Australia, the business that done the loans is in China, the indicted ''thief'' is right away dead, and the other one-time director mentioned to be entangled in the think loans, Wei, is moreover in China. Insider understands conjunction Tan nor Wei have properties in Australia, detached from Zheng He shares.
The diplomatic thorn for ASIC's chairman, Greg Medcraft, will be that Tan was a esteemed personality of the Malaysian Chinese Association diplomatic party, and served as a emissary financial apportion and emissary apportion in the Prime Minister's office beneath one-time Malaysian strongman Dr Mahathir Mohamad. Mahathir and his spouse attended the funeral.
The Zheng He loans story does not, however, finish there. Rong Cheng Wei's companies, according to Smith, defaulted on all the loans - leaving Zheng He gladdened to the banks final August.
Smith mentioned that in a new discussion with Wei ''he fixed that, as a effect of the defaults beneath the financial arrangements, the … loans had right away been repaid in full''.
In Zheng He's prospectus, Wei was not usually attributed with personification a purpose in the financing of Zhouning county's open gratification system, he was awarded ''the Excellent Entrepreneur endowment from Zhouning county's military force from 2003 to 2006''.
Tan's widow sealed an consent final Aug receiving shortcoming is to loan defaults, according to Smith, and the deposition around that same time of 140 million yuan in to Zheng He bank accounts, by two China-based companies related with a Lin Liang, were insincere to be the product of that agreement.
In February this year, a slight review found the money was no longer in the company's bank accounts, having been cold on the permission of Lin (who had been allocated chairperson of Zheng He's China subsidiary).
Smith's scrutiny in new weeks detected that Lin believed his companies had usually ever been lending the money to Zheng He, and had taken it back.
The treat appears to have been a small more intricate than that, though, since the money was changed in to Zheng He accounts nearby the finish of any month, and out once again at the commencement of the subsequent to month - meaning Zheng He's bank statements any month showed that the money was there, but in reality it was being used by Lin's companies.
CONFIDENCE KING
David Zohar, whose Aluminex Resources lasted reduction than a fortnight as a open company, at last appeared in a Perth justice final Friday charged with 3 counts of creation fake and dubious statements to the marketplace about the float.
Insider, in other guise, awarded Zohar and Aluminex in October 2008 the Britney ''Oops, we did it again'' Spears Award for a post-float stumble. Aluminex shares were offering at 40, but never traded on top of 15 - and the firm finished up having to lapse the subscriptions to investors.
Zohar has nonetheless to come in a request on the charges, any of that bring a limit two-year prison penalty, and was bailed to lapse on Aug 15 for other mention.
Insider thinks it might be a line-ball on who wins in this case, since Zohar is evidently a human of determination. He still has seats on the play of 5 listed companies of that Insider is wakeful - Iron Mountain Mining, Eagle Nickel, Red River Resources, United Orogen and Actinogen - all of that suggested the marketplace a month ago of the tentative charges.
Even improved though, is that Zohar never gave up on Aluminex. In 2009, he had Iron Mountain make an, obviously, off-market one-for-one share barter takeover offer is to company.
Given that he, spouse Julie and daughter Shoshanna (plus family companies) spoke for roughly 45 per cent of Aluminex, that understanding handily increased his hold on the Iron Mountain from 5 per cent to more than 25 per cent.
The next year there was an endeavor to purchase out choice holders in Aluminex; the Zohars were large there too.
Only yesterday, the Zohars revealed they were still shopping shares in a couple of his listed vehicles, suggesting they are assured he has a counterclaim to ASIC's charges.
Insider can usually instruct ASIC great fitness in embarking someone with that type of chutzpah.
insider@fairfaxmedia.com.au