(Corrects typo in Liu's name in paragraph 4)
By David Lague and Charlie Zhu
PERTH/HONG KONG May 23 Former managers and
staff at Liu Han's Australian operations were dumbfounded when
the Chinese tycoon went on trial last month for leading a
murderous, mafia-style gang.
In 2009 when Liu, 48, launched a bid to take control of Moly
Mines, executives then running the Perth-based company ordered
background checks. Their findings could not have been more
different: Liu was best known in China as a philanthropist in
his native Sichuan province.
One story stood out. Amid the devastation near the epicentre
of the 2008 Sichuan earthquake, a school Liu had helped build
remained standing and all of its students had escaped unharmed.
In contrast, many other shoddily built classrooms, so-called
"tofu schools", had collapsed, killing thousands of children.
Liu also donated generously to reconstruction and relief
For Moly Mines, Liu's philanthropy enhanced his credibility
as an investor in Australia. "No one said he was a criminal",
says Collis Thorp, then chief operating officer of Moly Mines
and a veteran of Western Australia's booming mineral sector.
After opening negotiations with Liu, the Australian
executives also learned he had global ambitions. Liu wanted Moly
Mines to become the platform for an
international commodity trading house. The company was sitting
on a massive molybdenum deposit, thought to be the second
biggest in the world, in Western Australia's mineral rich
Molybdenum provides strength, heat tolerance and corrosion
resistance in a range of specialized steel alloys for industrial
and military use and is seen as a strategic commodity. Liu said
he could arrange financing from Chinese banks to build and
operate mines on the deposit.
Neither Moly Mines nor Australian regulators say they turned
up any findings about Liu that would threaten the deal. In late
2009, Liu's privately-held Sichuan Hanlong Group won approval
from the Australian government, paying $140 million for 52 per
cent of Moly Mines and providing the company with a $60 million
loan. Hanlong also pledged to secure $500 million in funding to
develop the deposit.
For Moly executives, one unnerving fact did emerge from
Liu's past: someone had tried to kill him. In 1997, Liu narrowly
escaped an assassination attempt in his hometown of Guanghan
when a gunman fired two shots at him but missed, according to
reports in the official media of court cases in China. Liu's
Australian managers and advisors say they assumed the failed hit
explained why the Chinese tycoon always traveled with a
With Hanlong in control of Moly Mines and looking for more
investment targets, Liu was a regular visitor to Perth and other
To his local staff, the head of the biggest privately held
group in Sichuan appeared to be a stereotype of a cashed-up
mainland tycoon - one former employee noted a diamond-encrusted,
custom-made Franck Muller watch on his wrist.
When Liu entertained, he routinely ordered the most
expensive French wines, spending more than $12,000 on a bottle
of wine in Sydney, according to former staff. One former manager
recalls Liu spending $100,000 on wine in one meal.
And, he was passionate about cars. Liu boasted that he had a
fleet of 80 luxury vehicles, according to staff from his Chinese
and Australian companies. A former executive at one of Liu's
companies said the tycoon owned a Lamborghini SuperVeloce China,
a limited edition sports car specially designed for wealthy
Chinese buyers with a distinctive orange stripe through the
middle of the body.
Liu's greatest passion was gambling, his Australian and
Chinese staff say, staying at the tables until dawn and then
sleeping until mid-day. He was a regular at Crown casinos in
Perth and Melbourne. He sometimes complained when he lost
heavily, but always claimed he recovered his losses on
subsequent visits. In Perth, he often stayed in Crown's
presidential suite, former staff and advisors say.
At his trial, Liu admitted losing $128 million in Macau, $15
million in the United States, $9 million in Singapore and about
$1 million in Australia, according to prosecutors. "I was
unwilling to leave gambling tables, either when I was winning or
losing money," Liu testified, according to official reports of
his trial. "If I win, I want to win more. If I lose, I want to
recover my losses. I would only leave when I lost all my chips."
Australian executives who visited him on business trips to
Chengdu, where the Hanlong group has its headquarters, and other
cities in China, say Liu's routine typically involved short
meetings followed by long lunches or dinners in private rooms at
restaurants or hotels. "There would be lots of people running
around and lots of courses," says John McEvoy, Moly Mines'
former chief financial officer, who traveled in China with Liu.
To former Moly Mines staffer, mainland-born Xu Chuanmei, Liu
appeared to be intelligent, well-educated and avoided business
jargon in his Sichuan-accented Chinese. Liu speaks little or no
English and always used an interpreter while overseas.
"He likes to put things in a simple way," she says, adding
that Liu often travelled with his own supplies of Sichuan food
Eventually, Liu's plans for Moly Mines were frustrated as
stubbornly low molybdenum prices undermined the viability of the
company's deposit. Most of the executive team at the company
when Hanlong took control have since left or been replaced.
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
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
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. On Friday, a court in China's central Hubei province
was sentenced to death after a sensational trial on charges of
murder, gun-running, fraud, extortion, illegal gambling and a
string of other offences.
(Editing by Bill Tarrant)