New Frontier for tower developers
THE Chinese developers of the $1.3 billion Spirit super tower at Surfers Paradise have quietly taken over an obscure ASX-listed mining fund with interests in remote regions of Papua New Guinea and Africa.
Gold Coast lawyer Tony Hickey became a director of listed Frontier Resources Ltd on June 19, along with Yun Wei “Fenix” Dong, CEO of Forise Investment Australia, the company behind the Spirit development.
Mr Hickey’s company, Hickey Management, is managing the luxurious 479-apartment project for Forise Investment Australia, which is part of Chinese mega-company Fu Hua Holdings.
Agents for Spirit, at Surfers Paradise Esplanade on the former Iluka site, have sold 17 apartments in the lavish project, in which entry-level units are over $1.1 million. However, there is speculation the project could be under a cloud.
The developers have already spent an estimated $120 million on the development.
Mr Hickey did not return the Gold Coast Bulletin’s call for comment.
Chinese-backed projects around the world have been impacted by a clampdown on foreign investment by the Chinese Government, which intensified last week when it passed laws classifying foreign property development investment as “restricted”.
Exacerbating the squeeze is a devastating crash of China’s peer-to-peer or “P2P” lending system, which has seen thousands of companies collapse and individuals lose their savings in a failed system that holds up to $AU300 billion in outstanding loans.
The Gold Coast Bulletin understands Fu Hua has lost as much as $400 million in the P2P collapse.
Fu Hua’s operations in and out of Australia form a complex web of people and companies.
One related entity, Forise Investment Sydney, bought a 67.09 per cent stake in Frontier Resources for $6 million on June 19 and the company installed new directors the same day – including Mr Hickey, Mr Dong and Fei Peng, a director of Forise International Ltd, an advisory company listed on the Singapore Stock Exchange.
Mr Dong is director of six Australian-registered Fu Hua-linked companies, including Spirit developer Forise Investment Australia, which bought the old Iluka site for $65 million in 2015.
That company, as well as Forise Investment Sydney, is owned by yet another Fu Hua company, Forise Investment Group, which is based in the British Virgin Islands.
Fu Hua Group chairman Xin Wang is also executive chairman and majority shareholder of the Singapore-listed Forise International.
A director of that company, Men Tak “Christopher” Chong, is founding partner of another Singapore entity, ACH Investments, which bought a 9.58 per cent piece of Frontier Resources the same day Forise Investment Sydney nabbed their stake.
Frontier Resources’s website says it has interests in a company called Alufer, which this month sent its first shipment of bauxite from its mine in a remote area of Guinea, in South-West Africa.
Frontier’s other interests include West River, a company with copper projects in the Democratic Republic of the Congo and Toronto-listed Oyster Oil and Gas Ltd.
Frontier first listed on the ASX in 2003 and shares have traded between 1.2c and 2.5 cents at low volumes in the past year.
The Crime and Corruption Commission has confirmed it is looking into a complaint involving the Spirit development and Mayor Tom Tate, who has publicly taken credit for encouraging Fu Hua chairman Mr Wang to increase the tower from an initial 65-storey height.
Cr Tate did not declare an interest in the project during the council approval process after he received accommodation and a return flight to China from Forise Investment Australia.