Chinese tycoon Liu Han's Australian faces

The Warlord

A more equivocal picture of the Chinese tycoon began to emerge after Liu made takeover bids for two other Perth-based companies, Sundance Resources and Bannerman Mining. The Australian Securities and Investments Commission, Australia's corporate regulator, investigated executives at Liu's Australian subsidiary, Hanlong Mining Investment, for insider trading linked to the failed bids. One of the executives, Calvin Zhu Boshi, a Shanghai-born Australian citizen, pleaded guilty and in February last year was jailed for 15 months.

In an affidavit filed in the Supreme Court of New South Wales ahead of his sentencing, Zhu said shortly after he joined Hanlong Mining in 2010, fellow executives had described Liu Han as a "warlord".

"In Chinese culture, that means Liu Han is a powerful business person; he is successful in business, politics and the underworld," Zhu said in his affidavit.

Being part of Liu Han's executive team gave Zhu entrée to a high-flying lifestyle of business or first class air travel, top hotels and the best restaurants. In Hong Kong, he and colleagues stayed at VIP rooms at Hong Kong's Shangri-La Hotel and the Ritz Carlton in Beijing, he said in his affidavit. "Although everything was paid by Hanlong, I felt money was no object," he said. "I wielded money and power and I felt like I was really starting to become somebody important."

With a fellow executive, Zhu regularly spent over $3,000 a day on food and drink, he said. While in Beijing, a colleague bought two luxury cars for them to drive, an Audi Q7 and an Audi S5. "We were always chauffeured in Mercedes', Range Rovers and sometimes in Rolls Royces," Zhu said in his affidavit.

However, Zhu began to fear for his safety when he decided to confess to illegal trades and cooperate with the investigation into other Hanlong Mining executives. Zhu pleaded guilty to trading shares and derivatives in the Sundance and Bannerman bids. He also pleaded guilty to insider trading during stints with two earlier employers. Zhu admitted he made more than $370,000 in profit from insider dealing. Gains from the Sundance and Bannerman trades were transferred to Hong Kong bank accounts.

In his affidavit, he said Liu Han had assistants in Australia who had connections with underground figures linked to casinos and loan sharks. Zhu said he hoped that the Sundance takeover bid succeeded so that Liu would not be so angry with him. "As long as I do not get Han Liu into any trouble, I do not think he will come after me," he said in his affidavit.

Zhu needn't have worried about his safety. Within a month of the Australian starting his sentence, Liu Han himself was in custody.