Coverups, an honour – donations trial opens

Both sides of the political divide are involved in a High Court trial about deceptive party donations.

Sham donors were used and put forward by men on the inside of the National and Labour parties to disguise the true donor – businessman Yikun Zhang, who then was given a royal honour, the Crown says.

Former National MP Jami-Lee Ross and three businessmen – Yikun Zhang, Shija (Colin) Zheng and Hengjia (Joe) Zheng – all deny charges relating to National Party donations and are on trial at the High Court at Auckland in front of Justice Ian Gault.

Zhang and the two Zheng brothers also face charges alongside two men and a woman, who have interim name suppression, in relation to election donations made to the Labour Party in 2017.

Joe Zheng is further charged with supplying false or misleading information to the Serious Fraud Office (SFO) during their investigations.

Yesterday, prosecutor John Dixon, QC, said the case involved manipulation in the disclosure of political party donations.

The Crown alleges the defendants engaged in a fraudulent, device, trick or stratagem in which they intended to deceive the secretaries of the Labour and National parties, the Electoral Commission and the public.

All three donations were funded by Zhang, who is the true donor, Dixon submitted. Zhang was aided by people on the inside. For the National Party, that was Ross; for the Labour Party, it was one of the men with name suppression and the woman.

Zhang is a wealthy businessman, Dixon said.

Zhang received a royal honour in 2018 for services to New Zealand-China relations and the Chinese community and was seeking that honour during the

time that some of the donations were made.

Dixon said this was possible justification or motive for the donations.

Colin Zheng was Zhang’s righthand man and would often communicate on behalf of Zhang.

Ross knew Zhang was the true donor, yet provided the party with the names of the ‘‘sham donors’’, Dixon submitted.

For the Labour Party donations, one of the men who has name suppression allowed his name to be put forward for the purchase of a painting and recruited others to put their names forward as the ‘‘sham donors’’.

‘‘He played an active role in the coverup,’’ Dixon said.

The other man was the person on the inside for the Labour Party. The woman also aided in the coverup, Dixon said.

The Labour Party 2017 donation revolves around five paintings being sold to different people for a $60,000 payment at a sham auction, Dixon said.

The Crown will submit evidence that Zhang was the true owner of the paintings and source of the money. Ahead of the purchase, a meeting was held between the defendants where it was agreed Zhang would buy the painting, but others would be put forward as the donors. A total of $34,840 was then transferred to the Labour Party in smaller donations using five different names.

Two months after the March 2017 Labour donation, Zhang, Shijia (Colin) Zheng and Ross met at Cibo, a restaurant in Parnell, Auckland.

It was agreed at the meeting that Zhang would donate $100,000, but other names would be put forward as the genuine donors, and it would be broken up in smaller chunks to get under the disclosure threshold, Dixon submitted.

In late May 2017, Ross sent Colin Zheng the Botany electoral party account and the rules regarding donations.

The judge-alone trial before Justice Ian Gault continues.