Wanted businessman to fight Australian extradition request over alleged multi-million tax fraud

The Australian Government wants to prosecute Li Zhang over alleged tax offences. Photo / Sam Hurley

A Chinese businessman, who was living undetected in New Zealand, will fight an extradition request by the Australian Government over an alleged multimillion-dollar tax fraud.

Li Zhang, 56, briefly appeared this morning in the Auckland District Court as Australian authorities attempt to prosecute him.

The alleged scheme is linked to a luxury New South Wales golf course and resort which saw the Australian Government allegedly defrauded of $10.5 million.

The court heard today from Zhang's lawyer Quentin Duff that his client will challenge the authority of the extradition request.

Zhang, who was earlier declined bail, will remain in a Kiwi prison until a full extradition hearing can be heard later this year.

The Chinese-born Australian citizen had left New South Wales when the Australian Taxation Office (ATO) and Australian Federal Police tried to arrest him in 2009.

He then disappeared from authorities for a decade.

But on April 4, Zhang was arrested by the New Zealand Police. It came after officers attended a minor car crash, Australian media reported.

An Australian warrant was endorsed by the New Zealand courts for his arrest, police said in a statement to the Herald.

It became apparent that Zhang was living at a rental property north of Auckland, however, it remains unknown how long he has been living in New Zealand.

According to the ATO, Zhang owned the Chinese construction company Hightrade, which saw more than 100 of its subsidiary companies collapse 10 years ago.

The company's finance head, Simon Chan, also left Australia and has not returned.

Hightrade was used to engage in fraudulent behaviour during the construction of the Pokolbin golf course and its resort in the Hunter Valley, according to the ATO.

The Australian Government alleges the construction group inflated the cost of building the resort by more than $115m.

Hightrade executive Song (Peter) Chang was charged with tax fraud and so far is the only member of the company to face a criminal prosecution in Australia.

Chang was jailed in 2017 for five and a half years for conspiracy to defraud the Australian Government.