Top Australian entrepreneur jailed in China over 'embezzlement'

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This was published 13 years ago

Top Australian entrepreneur jailed in China over 'embezzlement'

By John Garnaut IN BEIJING

MATTHEW NG, one of Australia's most successful entrepreneurs in China, has been detained on suspicion of embezzlement after an acrimonious dispute with his Chinese business partner.

Guangzhou police are yet to lay charges or reveal their case for detaining him and this week refused his application for bail. Mr Ng's incarceration comes nine months after the Australian iron ore salesmen Stern Hu was sentenced to 11 years in jail, amid fears that China's business playing field is increasingly tilted against overseas business people.

A spokesman for the Foreign Minister, Kevin Rudd, said Mr Ng and his family were receiving consular assistance.

A business associate told the Herald Mr Ng's mental state was deteriorating and his wife, Nicki Chow, and their two young children had taken refuge in Hong Kong after becoming distraught and needing medical support.

Distraught ... Matthew Ng and his wife Nicki Chow in 2009.

Distraught ... Matthew Ng and his wife Nicki Chow in 2009.

A Guangzhou security source said it was "just an economic case", while Mr Ng's financial backers said "foul play" was involved and they would keep fighting.

Mr Ng, 44, founded and ran a company called Et-china, which is backed by powerful Australian and international interests including James Packer's investment fund, Ellerston Capital.

Mr Ng has earned accolades for building Et-china into one of China's largest privately invested travel companies and listing it on the London stock exchange.

But Mr Ng has been feuding about control of his company's profitable subsidiary, Guangzhou GZL International Travel Services, with a conglomerate called Guangzhou Lingnan International Enterprise Group, which enjoys the backing of Guangzhou's deputy mayor, Wu Yimin.

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Several unsourced local media reports allege Mr Ng's company acquired the Guangzhou business in breach of foreign ownership regulations with the help of its former chairman, Zheng Hong.

Since September Mr Zheng has been detained in the Communist Party's quasi-legal interrogation procedure known as shuanggui, while Mr Zheng's successor was also briefly detained for interrogation.

A representative of Et-china's wealthy Australian shareholders said acquisition of the Guangzhou business had been approved by all relevant local authorities and audited several times. He alleged the detention was inspired by executives at the disgruntled partner company, Lingnan, which had been trying to frustrate Mr Ng's agreement to sell the Guangzhou travel business to a Swiss travel giant, Kuoni Group.

"Lingnan believe if they can scare us off they can get the company for a song and then list it on the Shanghai stock exchange," said the shareholder representative. "What they don't realise is we've been here for 10 years and we're going to hang on," he said. "We think this is absolutely wrong".

In May 2009 the Australia China Alumni Association honoured Mr Ng as its entrepreneur of the year.

The founder of the association, Edward Smith, said Mr Ng was a hard-working family man.

"Throughout all our dealings with Matthew he has always been extremely ethical and generous of his time," said Mr Smith, who works at Beijing Consulting Group in Beijing.

"We can only surmise that it is perhaps related in some way to a commercial dispute about the recent sale of Et-china." He urged the Chinese government to investigate promptly and transparently.

Et-china issued a statement saying Mr Ng had been detained on suspicion of "misappropriation of company assets".

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It said no charges had been laid and there was no information about the cause of the detention, while the acting chief executive Chris Rose urged authorities to resolve the matter and allow Mr Ng to return to work.

Mr Ng was born in Guangzhou at the beginning of the Cultural Revolution and emigrated to New Zealand in 1986 and Australia in 1992.

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