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As billionaire accused tax cheat Phillip Dong Fang Lee wrangles a multimillion-dollar tax liability and a property empire under government control, tax office records have linked him to a wholly separate trophy estate in Bellevue Hill that bears the weight of a $65 million mortgage.
The 1920s-built residence, long known as “Tokay”, is owned by Phillip Lee’s former business partner in China, Helena Huiying Hu, with whom he has for years shared business interests and bank accounts in Australia.
Title records reveal that the $65 million mortgage from private lender Hygge Investment carries interest rates of 9.5 to 18 per cent for a loan to Hu Property Investments Pty Ltd, a corporate entity that was briefly majority owned by Phillip Lee’s son Felix Lee before the loan was executed last year.
The 12-month loan facility is due to expire in the coming weeks, and is expected to be rolled over on another 12-month term.
Helena Hu’s ties to the complex financial affairs of Phillip Lee and his wife Xiaobei Shi are detailed in the forensic report by the Australian Tax Office into Lee and Shi’s income affairs that culminated in 2021 with freeze orders and a tax debt of $280 million.
The investigation included extraordinary allegations about Phillip Lee’s “sham arrangements” to deceive the authorities and funnel hundreds of millions of dollars from China into Australian bank accounts and real estate.
The 2021 affidavit by a top-ranking ATO official documents suspicions that the 60-year-old businessman secretly controlled business and financial interests in China despite earlier vowing to the Australian government that he had sold his Chinese business.
Further, “those businesses appear to be held in structures which mask Mr Lee’s true ownership and control of those assets”. “In particular, the [tax] commissioner believes that Mr Lee has structured his financial affairs in such a way as to give the appearance that his mother and business associates are the owners of businesses which are in truth operated and owned by him”.
There is no suggestion by this masthead that the allegations are true, only that they were made.
The affidavit also reveals that the freeze orders were ultimately issued over the assets, bank accounts and even a fleet of luxury cars belonging to Phillip Lee and his wife Shi without warning.
At the time the tax office investigation was underway, the tax commissioner was warned by AUSTRAC of “possible attempts by Mr Lee and the other respondents to remove assets from Australia”.
The tax dispute has since settled, but the final liability remains unpaid, and both Phillip Lee’s and Shi’s property assets remain in the control of the ATO, care of a mortgage to the Commonwealth of Australia.
The ATO’s mortgage extends to farms and a bushland retreat on the state’s Mid North Coast, as well as an industrial property in Lane Cove West, and residential real estate across Sydney, including Felix Lee’s art deco apartment in Point Piper (owned by his mother), and the family’s Point Piper mansion Mandalay, where the prime minister recently dined.
The ATO has no such hold on the Bellevue Hill estate of Helena Hu, however, the property’s ownership and financing were closely scrutinised by the tax office as part of its investigation into Phillip Lee’s financial affairs.
Hu purportedly told the tax office she was Phillip Lee’s business partner before he migrated to Australia, where they were co-founders of Shanghai Shenfa Investments Co. In Australia, Hu and Phillip Lee are also co-signatories on a couple of bank accounts and previously shared an interest in Lee family corporate interests.
Hu purchased Tokay in late 2001 in an off-market deal for $11.088 million, just four months after she arrived in Australia, and it was secured by way of an $11.9 million loan from NAB, of which Hu and Phillip Lee were co-signatories.
According to the tax office, that loan was later extended until 2024, and guaranteed by an industrial property in Lane Cove West previously owned by Phillip Lee. Since 2019, that industrial property has ultimately been owned by the corporate interests of his wife Xiaobei Shi.
The loan was serviced from the rental income from Shi’s Lane Cove West property.
Attempts to contact Helena Hu have not been successful, and Phillip Lee did not respond to a request for comment.
The highly complex corporate structure of the Lee family property empire includes private company Hu Property Investments Pty Ltd, which was registered in early 2024 with Felix Lee as the majority owner and Hu as a minority shareholder. A company restructure in April 2024 put the company in Hu’s ownership alone, and four months later the company took out the $65 million loan.
Felix Lee has worked to separate his interests from his father’s business in recent years, founding his own investment office chaired by former federal treasurer and ex-ambassador to the United States Joe Hockey.
In response to inquiries about Hu’s Bellevue Hill estate, a spokesperson said he has no comment on any financial arrangements that he may or may not have.
The 20-room residence on 3666 square metres was built more than a century ago for pastoralist and parliamentarian Bert Falkiner and his wife Ethel, and owned in the 1980s and 90s by the late Singaporean tycoon Tan Sri Khoo.
Khoo sold the property in 1999 for $6.8 million to Loretta Young, who on-sold it to Hu two years later for $11.088 million with plans, but no renovation, by architect Michael Suttor.
In 2013, Xiaobei Shi purchased the contemporary house next door with the curved facade for $7.7 million. It is now mortgaged to the Commonwealth of Australia.
Shi had originally hoped to keep the wide-ranging audit of her and Phillip Lee’s financial affairs out of the public record by way of suppression orders given her fears of reputational damage. Shi told the Federal Court that in the wake of the freeze orders, Credit Suisse had terminated a $30 million loan, forcing her to sell shares to repay about $20 million already drawn down on it.
This masthead fought for months to obtain a copy of the damning 189-page affidavit, and was ultimately granted access after Justice Robert Bromwich dismissed the suppression application.
Bromwich stated in his judgment that the principle of open justice is a fundamental aspect of the judicial system, and embarrassment is not a reason to make an order.
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