Two relatively unknown property figures are the faces of a fund that has paid $499m for one of the biggest and most important development sites adjoining Sydney’s new second airport.
The sale of the 344ha site by Roy and Ron Medich to Roberts Jones Funds Management has sparked interest and not just for the relative obscurity of Bob Gong and Jonathan Pan, who head the fund.
The Northern Gateway site, which is earmarked as the logistics and employment hub for the airport, is a critical strategic asset. Yet the Guardian has confirmed the purchase will not require approval by the Foreign Investment Review Board because the two shareholders of the company are Australian citizens, and debt funding is not scrutinised by Firb.
Pan, who spoke to the Guardian on behalf of the company, said: “Roberts Jones Funds Management and a consortium of major institutional financiers supported and assisted in debt funding the acquisition.
“There are many investors in the consortium, but given confidentiality agreements in place, we cannot disclose further details.”
He said Roberts Jones did not require approval from Firb because both he and Gong were Australian citizens.
The Australian government has expressed its concern about increasing Chinese investment in the Pacific and there have also been some concerns about some Chinese investment in key strategic assets in Australia.
The issue first surfaced in 2015 when a company, Landbridge, signed a 99-year lease for the Port of Darwin.
Although Defence approved the deal, it soon emerged that Landbridge had ties to the Communist party and the Peoples Liberation Army, prompting defence officials and academics to question the deal.
There is no evidence that Roberts Jones, which will own the Northern Gateway land, has any links to the Chinese Communist party.
Company records reveal the two directors and sole shareholders of the fund are Bo Gong (Bob Gong) and Cheng Jia Pan (Jonathan Pan). They are both Australian citizens.
But there is another company involved in the Northern Gateway development: Boyuan Holdings Ltd (BHL), which the Australian Financial Review says was the first Chinese property developer to list on the Australian Securities Exchange.
A spokesman for BHL said: “Roberts Jones Development Pty Ltd has appointed BHL as the development agents for the project given BHL’s historical knowledge of the site and the Western Sydney Aerotropolis.
“BHL will be working alongside other local project management teams, consultants and contractors, to transform the Elizabeth Drive site into a major employment, logistics and mixed-use precinct servicing the airport and greater aerotropolis.”
Pan confirmed the arrangement.
Until recently BHL was negotiating to buy the site itself, but has now pulled back and will become the lead developer.
The major shareholder of BHL is Shen Yuxing, the founder and chairman of the Hong Kong-listed property developer Jiayuan International Group. Shen also goes by Shum Tin Ching and according to Forbes he’s worth $US1.1bn, putting him among the top 100 richest men in China.
According to Jiayuan’s website, Shen made his fortune constructing large-scale residential and commercial developments in mainland China. It boasts a portfolio of 81 property projects covering the cities of Nanjing, Yangzhou, Changzhou, Nantong, Taizhou, Zhenjiang and Suzhou.
Several are themed to look like other capitals. There is a London with Big Ben and a Paris with an Eiffel Tower. Another one is styled to resemble Rome.
In 2016 BHL began buying up sites in Bringelly, Austral and Marsden Park, not far from the airport site.
By the end of that year Shen was rubbing shoulders with the former prime minister Tony Abbott at a function to promote how 3D printing technology could cut costs in the construction industry.
But by 2018 the company had hit the big time, making headlines with a plan to lead a consortium to build a $22bn city on the Northern Gateway site.
BHL’s plan was grand. It proposed a new international university and education precinct, a wellness and healthcare centre headed by world-renowned neurosurgeon Charlie Teo, a Westfield retail entertainment precinct and a hi-tech logistics hub, as key elements of the city it planned on the site.
According to analysis carried out by PricewaterhouseCoopers, the proposed Northern Gateway development would create 38,000 jobs, resulting in $14.3bn economic output in the western Sydney region.
In a 2019 release, Jiayuan explained its international expansions, saying it had “ventured into countries and regions along the ‘Belt and Road’ initiative, such as acquiring land parcels in Cambodia”.
But something went awry.
BHL never completed the purchase of the site from the Medichs. A spokesman was unable to say whether issues with Firb had prevented the sale.
But now the site has been sold to Roberts Jones, as first reported in the Australian last week, and BHL will become the development partner.
Until they set up Roberts Jones Development Fund in August, Gong and Pan worked at BHL as “strategic advisers”.
Gong, born in Henan, China, studied a masters in computer science at Wollongong University in the early 2000s before getting into the property industry in 2006 selling off-the-plan developments to predominantly Chinese-speaking investors.
Pan, 40, hails from Perth. His only brush with the media came in 2015 when a noodle shop he owned was fined $8,000 after baby cockroaches were discovered in spring rolls.
He was also a director of a franchise in Perth, Wokinabox, and was involved in property before moving east and getting into the property game with Gong.
The first venture they had together was Haisheng Corporation, registered in 2014.
The shareholders of Haisheng were Gong, Pan, Leo Jia, now head of the Macland Investment group in Rhodes, Weijie Chen, and another company Haisheng China, which held 65% of the shares.
Weijie Chen, known as Golden Chen, had only a small shareholding in Haisheng but has an outsize voice in the Chinese community.
According to the Australian Strategic Policy Institute’s paper on the Chinese media in Australia, “The influence environment”, Chen is the majority owner of Australia Southeast Net Media, the Australian online wing of a state-owned media outlet from China’s Fujian province.
SEN Australia’s parent website, Southeast Net (SEN), is supervised by the Fujian Provincial CCP Committee Propaganda Department and managed by the Fujian Daily Newspaper Group.
Golden Chen has reportedly been a member of three united front organisations in China – the Fujian Federation of Returned Overseas Chinese, the Fujian Federation of Overseas Chinese Entrepreneurs and the Fujian Overseas Exchange Association.
By 2015, Haisheng had bought a $30.5m site at Sydney’s Olympic Park, where it planned to build a 245-unit residential tower. It was also sponsoring the Central Coast Mariners in their campaign for the Asian Champion’s League.
According to the release at the time: “Haisheng has more than 20 years’ experience in commercial, residential community and government infrastructure projects in 10 different provinces across China and is now seeking to become one of the fastest growing property developers in the Sydney metropolitan area.
“In addition to Haisheng’s Australian property activities the company is also working towards establishing a strong agricultural premium Australian Wagyu meat operation for export to the Chinese market.”
But Haisheng seems to have gone into hibernation in 2016 with few runs on the board. The site at Olympic Park was sold to another Chinese property company.
Instead Gong and Pan moved to BHL, then Roberts Jones and are now at the forefront of one of the biggest developments of the decade.
The NSW government has rezoned the Northern Gateway site as predominantly an employment zone, which means BHL’s original plan for a mini-city is unlikely to gain approval.
“The precinct will become a hub for manufacturing, warehouse and distribution functions, while the inclusion of a new metro station in the proposed Science Park will offer scope to create a vibrant and well-connected mixed use strategic centre,” the Department of Planning, Industry and Environment’s precinct plan says.
Pan said the original deal did not proceed because “the original buyer never acquired the site successfully”.
“When the original deal did not eventuate, Mr Gong and I decided to pursue new opportunities in property development and funds management.
“We used the opportunity to form a new company, Roberts Jones, which has previously formed a very good relationship with the vendor, plus our access to institutional funding streams and a strong local network of contractors and consultants which we believe can help us deliver the project,” Pan said.
The new deal certainly proved lucrative for Roy and Ron Medich who bought the site for $3.5m from the CSIRO in 1996.
But for Ron at least, it may be some time before he can spend it, as he still has many years to run on his 39-year sentence for the murder of businessman Michael McGurk, who was gunned down in his driveway in Cremorne in 2009.
Medich is appealing the verdict.
