M&A

As good as gold

Red faces after Rolex gifts turn out to be real

Rolex w

It was a simple mistake, they said. Two and a half years ago an instant noodle tycoon gifted some pricey Rolex watches to a group of Australian politicians and their wives at a semi-official dinner. The timepieces got accepted and only declared at a few hundred Australian dollars of value. What could possibly be the excuse? That billionaire Li Ruipeng delivered the goods in plastic bags, so they must have been fakes…

Except, of course, they weren’t…

This story broke earlier this month, and it has sustained itself with more recent revelations that the watches may have been bugged and that Li hoped his lavish gifts would buy him political influence.

He is currently camped out somewhere on the Gold Coast in Queensland, avoiding various creditors from China and Australia.

The watches have now been handed back, their true value ‘only’ realised after a politician with a real Rolex complimented the Liberal politician Ian McFarlane on his gift. McFarlane then discovered the error, according to media reports.

“My understanding is that they were handed over in a plastic bag, as has been reported, and I think everybody was of the same view [that they were fakes],” a government spokesman told the Guardian newspaper earlier in February.

Interestingly, little has been said in the Australian press about why ministers would hold on to fake watches, which are an obvious violation of intellectual property laws.

On February 18 the former Defence Minister Joel Fitzgibbon told the Australian press that the watches should also have been checked for bugs, regardless of their origin. He said it was “absolutely possible” that they could have been tampered with and that such gifts should always be checked by the Australian Signals Directorate.

“Intelligence sources also said the issue of China targeting Australian MPs is one actively discussed in the intelligence community and that at the very least, gifts of any kind should always be checked,” warned the Sydney Morning Herald’s national political reporter Latika Bourke.

The offices of McFarlane and the former minister Stuart Robb both confirmed the watches had not been scanned. Former leader Tony Abbott – another Rolex recipient – declined to comment.

In the meantime, Li Ruipeng’s exact whereabouts are unclear. The Australian Financial Review reported this week that the billionaire, now referred to as “Mr Rolex” in the local media, was in hiding on the Gold Coast, a resort area in Queensland. Li is being pursued by creditors in China, as well as Australian firm Wealthcare Custodians Limited, which is said to want repayment of A$300,000 ($217,073).

Li seems to have been a lively lobbyist, with the Australian Financial Review also noting that he organised a trip to China for a group of Australians including a politician from Queensland, Rob Molhoek, in 2014. Molhoek said he took the trip in a personal capacity but some of his costs were paid, including six nights of accommodation. He also received a watch from Li (this time a Cartier) but declared it and donated it to charity.

The Chinese businessman was “unsubtle” in the way in which he would “try to buy favours” Greg Roberts from Wealthcare told the newspaper. Li put up pictures of himself with Australian politicians at his offices in China as proof of his useful contacts. Li was supposed to be well-connected at home too – Wealthcare got involved with him in hoping to leverage his contacts with wealthy Chinese investors.

Li’s case comes at a time when controversy about Chinese investment in Australia is growing. Last year Canberra blocked the sale of Australia’s largest cattle station to a Chinese firm. However, this week Moon Lake Investments (a private Chinese company) was given the go- ahead to buy Australia’s largest dairy farming business, Van Diemen’s Land Company in Tasmania. Treasurer Scott Morrison says he sees no conflict with Australia’s national interest in selling it to a Chinese buyer.

Senator Nick Xenophon, an opponent of the sale, said a local bidder should have been preferred, and added acidly “the current ‘national interest’ test is as clear as mud and virtually meaningless”.


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