He bought a Sydney home for $95m. It then took five years to settle, and has now come at an extra cost

2 months ago 4

Five years after goldmining billionaire John Changjin Li bought one of the most expensive houses in Australia, he has finally completed the $95 million deal.

But it has come at a cost. The trophy home known as Edgewater not only incurred a $6.5 million stamp duty but also played a pivotal part in ending his marriage to Maria Meihong Yang and, most recently, landed a tax bill of $25.9 million.

John Changjin Li has launched legal proceedings against a $26 million tax bill incurred on the purchase of his Point Piper trophy home.

NSW Supreme Court documents released on Thursday reveal Li is seeking to have the tax debt set aside, along with any penalties and interest, while the ultimate ownership behind the waterfront mansion is played out in separate proceedings.

The ownership of Edgewater has been a matter of contention since Li first exchanged to buy it in 2020 in a company name then owned by his fiancee, Maria Yang.

At the time, it was the second-highest house price in the country, even though it was sold in two parts because it was configured as a duplex home to the Moss and Brender families of the Katies fashion retail empire.

Raine & Horne agent Nina Sokolov is John Li’s preferred agent, selling all the properties owned by his investment companies.

But by the time the first half of the deal was due to settle two years later for $47.5 million, Li and Yang’s marriage had fallen apart. Li moved into the property soon after, with his former wife Athena Changren Cheng also in residence.

Yang was left to move back to her Zetland unit, only to then discover that her ownership of Edgewater’s holding company had been changed without her consent.

Corporate records revealed that Edgewater was transferred from Yang to three corporate entities controlled by Li by way of a complex corporate structure. Outside of Li’s stake in the property ownership, the remainder was split between Yang and real estate agent Nina Sokolov.

It was that transfer of ownership that triggered the tax debt being claimed by the state’s Chief Commissioner of State Revenue, Phil Minns.

According to documents lodged in the Supreme Court, the tax commissioner claims that when the property was transferred to Li, it incurred a landholder duty, and Li’s significant interest in the property gave rise to a surcharge because he is a foreigner.

The state’s stamp duty surcharge was doubled to 8 per cent for foreign buyers in 2017 in a bid to address housing affordability, and raised again to 9 per cent early this year.

But Li argues the share transfer from Yang to his corporate interests two years ago is yet to take place because it is subject to an ongoing and separate legal dispute over its ultimate ownership.

The fight over Edgewater’s ownership was initially launched by Yang when she discovered her 100 shares of the property had been transferred without her consent.

In the court proceedings that followed Yang won, and her ownership of it was reinstated two years ago.

Financing the win was MHN Asset Management, which claimed it was promised 45 of Yang’s 100 shares as part of its funding arrangement.

But the legal financing company never transferred their share of the property.

Instead, records show that two days after MHN demanded its shares, Yang’s 100 shares were forfeited, and Edgewater’s ownership was again restructured to restore ownership to the three companies in Li’s control: Kingland AC, Point Piper Sun and Point Piper Yang.

In May, freeze orders were issued over Edgewater on behalf of MHN in lieu of upcoming legal proceedings slated to be heard in the Supreme Court next year.

Despite the freeze orders and slew of legal disputes, Li and Cheng continue to call the waterfront residence with one of the suburb’s few tennis courts their home.

Updated settlement records show the final $47.5 million payment for the second half of Edgewater was funded with help from four mortgages, including one to Cheng’s finance company, Athena Rose Capital. A statutory charge on behalf of the tax commissioner was also lodged on the title earlier this week.

Cheng has emerged as Li’s main financial backer since they moved to Australia, according to a recent liquidator examination in the Federal Court looking into some of Li’s other corporate interests, now in liquidation.

Among the revelations is Cheng’s prominence as a business leader in China, as chair of China’s mining, real estate and biotechnology conglomerate Jinluan International Group, and details about how she was listed as a dishonest debtor and slugged consumption restriction orders before she moved to Australia in 2019.

Li and Cheng’s business concerns are not limited to Australia. The former couple’s goldmine PT Sultan Rafli Mandiri (SRM) in Indonesia’s West Kalimantan region was sealed in 2021 by the local authorities and has not reopened since then.

According to a judgment recently handed down by the South Jakarta District Court, Li is also listed on the Interpol Red Notice list, and a fugitive warrant was issued for him in February 2022 for allegedly violating Indonesia’s Mineral and Coal Mining Law.

Athena Changren Cheng, chair of Jinluan International Group, has a page dedicated to her on the China’s Internet search engine Baidu.

The judgment was the result of proceedings initiated by two other SRM board members, who successfully sued for a company restructure given the legal issues besetting some of the company’s senior executives, and the fact that neither Li nor Athena are in the country any longer.

In that judgment, Li dismisses claims he had fled the country, saying he left Indonesia to seek legal protection in China given injustices in the legal process in Indonesia.

When Li first bought Edgewater five years ago, it ranked as the second-highest house sale in Sydney behind the $100 million sale of the Fairwater estate, but has since been relegated to the fourth place behind other Point Piper properties Uig Lodge and Elaine for $130 million each.

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