Alleged fraudster has $60 million of assets frozen
Media can now reveal that a Canadian businessman, alleged to have had unlawfully benefited from criminal activity in China, has had $60 million worth of New Zealand assets frozen.
Edward (Xiao Hua) Gong does not live in New Zealand or run a business here but a joint investigation by NZ Police with Canadian and Chinese authorities led to criminal charges being laid late last year.
Mr Gong is expected to appear in a Toronto court next week, a spokeswoman from the Ontario Securities Commission said.
The charges laid by Canadian authorities relate to the fraudulent sale of hundreds of millions of dollars of securities in two companies, O24 Pharma and Canada National TV, to Chinese citizens.
In a judgment handed down today, Justice Matthew Downs said the public is entitled to know that the High Court has restrained Mr Gong’s assets and the reasons for the restraints.
Media applications from NZ Herald, Stuff and NBR were opposed by Mr Gong’s legal team, which includes former solicitor general Mike Heron, QC, and Marc Corlett, QC.
The original freezing order was granted by Justice Paul Davison in March last year. The judge had said there were reasonable grounds to believe Mr Gong had unlawfully benefited from significant criminal activity in China, and referred allegations of a “pyramid-style fraud in China in the order of $202 million.”
He also referred to the alleged transfer of $77m to Mr Gong’s New Zealand bank accounts.
While Mr Gong had argued publicity in New Zealand would compromise the fairness of his Canadian criminal trial, the judge thought otherwise.
Justice Downs says a criminal trial in New Zealand is unlikely given Mr Gong’s prosecution in Canada and it would be strange if the New Zealand courts continued to suppress information overseas courts had not. Mr Gong does not have name suppression in Canada or China.
The judge said that while previous decisions on the file will be made available to media, substantial affidavit evidence on the file would not be. This was because that material was detailed and extensive and reportage would be one-sided.