2 hours ago
3
A previously jailed, struck-off lawyer and an ex-bankrupt son of a Chinese property tycoon have been battling in the Supreme Court over an alleged $3 million loan.
On one side is former lawyer Ronglai “Martin” Zhang, 46, a bankrupt who has spent time in prison.
Zhang has multiple convictions for firearm offences, drug-related offences, assault, possession of stolen goods, driving while disqualified and, more recently, possessing prohibited drugs and driving while drug-affected.
Zhang has alleged that former bankrupt property developer Mingfeng “Richard” Gu, 43, has not repaid the millions he borrowed in 2017. Gu told the court he’d already repaid $9 million to Zhang.
In 2015, Gu, whose fleet of luxury cars included a Maserati, a Bentley coupe and a Ferrari Spider, was behind the wheel of one of his five Mercedes-Benzes when he was caught drink-driving in Sydney’s CBD.
According to reports at the time, on the night he was charged Gu launched into a tirade against police, saying: “I will kill you. I drank drove, who gives a f--k ... charge me, who cares? I earn millions of dollars. I don’t care.”
Gu pleaded guilty and was fined $1000. Because it was his third disqualification offence, he was given a six-month prison sentence that he was allowed to serve in the community under an intensive corrections order.
His company, AXF Group, was launched in Australia in 2005 as the Australian arm of the Shanghai-based company of his wealthy father, Qi Liang Gu.
Gu’s AXF Group controlled a property empire until its collapse in 2020 with debts of more than $200 million.
“Nothing adds up,” said court-appointed liquidator Malcolm Howell, who was later ousted by AXF’s related-party creditors. “It’s a real mystery to us as to how he has used $200 million of creditors’ funds.”
When Howell began investigating the collapse of AXF, he discovered Gu hadn’t disclosed that one of the company’s assets was Fat Fish a 26-metre yacht worth up to $4 million.
The boat was subsequently repossessed and sold by the NAB, a major creditor.
Gu failed to attend court in 2018 when he was convicted for failing to provide books, records or company accounts to the liquidator. He was fined $15,000.
The failed property tycoon was the subject of unwelcome publicity when he defaulted on the purchases of several high-profile trophy homes. In 2016, Gu forfeited a million-dollar deposit when he failed to complete the $19.8 million purchase of actress Cate Blanchett’s house in Hunters Hill.
After fighting off a number of attempts to bankrupt him in Sydney and Melbourne, Gu was finally bankrupted in 2021. His bankruptcy was discharged in 2024.
Zhang told a Supreme Court hearing three weeks ago that in May 2017, Zhang’s company Rolex Services lent Gu $3 million, which Gu has yet to pay back.
Zhang’s troubled history was raised. Only last year, a Supreme Court judge sentenced Zhang to six months’ imprisonment, which was suspended on condition he be of good behaviour.
The bankrupt had breached court orders by removing almost $1 million from an account which had been frozen. He was ordered to surrender his legal practising certificate.
In 2024, Zhang was serving time in Wellington jail, west of Sydney, when he was assaulted by three fellow inmates who punched and hit him with a plastic chair. He suffered a fractured cheekbone after they kicked and stomped on his head.
Facing a return to jail, this time for criminal contempt of court, Zhang told the 2025 court hearing case that the prospect of being incarcerated again filled him with “dread and panic”.
Zhang obtained his commerce/law degree from the University of Melbourne. After working in Beijing for several years, he set up practice in Sydney, offering to help Chinese entrepreneurs “to seize fleeting opportunities” to invest in property developments.
However, he was later found to have forged signatures and to have sold the same units several times, pocketing the profits.
A former China-based client obtained a judgment against him for $3.5 million. In September 2021, when Zhang didn’t pay, the businessman served Zhang’s bankruptcy notice to him in Goulburn jail, where he was then an inmate.
In May this year, Zhang was sentenced to a community correction order for a period of 12 months over further drug and driving offences.
A fortnight after his latest conviction, Zhang, who is still bankrupt, had his day in court over the alleged loan to Gu.
The matter was resolved by Justice Richard Cavanagh on May 28. The judge said it was “most surprising” that only two days before he was facing a strike-out application, Zhang raised for the first time that there had been a later oral variation to the 2017 loan agreement with Gu.
Zhang’s case was dismissed, and he was ordered to pay Gu’s costs of $30,344 as well as court costs of almost $20,000.
Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.
