According to a court judgment obtained and translated by the Herald, Liu - as general manager of real estate development company Chongqing Tianlong - sold real estate to the political leader and his wife at heavily discounted prices, purchased some back at inflated rates and waived debt to a total benefit of $375,000 to the couple.
In return, the Chinese politician used his position to support Liu's construction and cement businesses by approving projects as well as land permits and mining licences.
The court's verdict states that Liu gave evidence at the 2006 trial of Ping Ma and his wife which confirmed his "buying low, selling high" real estate deals described by Chinese authorities as "emotional investment".
Ping Ma was the Secretary of the Tongliang County, Chongqing committee of the Communist Party of China.
"Although Liu didn't make a specific request in exchange for the gift, the intention was clear that as a county party secretary Ping Ma would have the power to benefit the companies in the future," said the verdict of the Intermediate People's Court of Chongqing.
"In the process of accepting several 'emotional investments', Ping Ma had made a clear commitment: 'Come to me whenever you need, I will help as much as I can.'
"The two defendants paid obviously lower-than-market prices to buy [Liu's company's] development of residential, retail and commercial buildings.
"Although the behaviour is different compared to directly receiving properties, it is only a different method of covering their criminal acts of bribery."
Ping Ma and his wife, Jianping Shen, were convicted of accepting bribes and jailed for 13 and five years in prison respectively for obtaining $375,000 through the real estate deals. The convictions were upheld on appeal to the Higher People's Court but Shen's sentence was reduced to three years.
Liu's Auckland-based lawyer, Todd Simmonds, said that neither Liu nor his company was charged with any alleged offending.
"The involvement of Mr Liu in these proceedings was simply that of a witness," Mr Simmonds said.
"Mr Liu does not wish to make any further comment in relation to this matter."
Speaking from Samoa this morning, Prime Minister John Key said the history of Liu's role in the court case lay with the Labour Party to examine.
"Labour were the one who granted him residency... it would have been for Labour to assess," he said.
He said he did not have information on the details of Liu's role in the court case and wouldn't be asking for that information from the Immigration Department.
He said Liu's history in China did not affect his political donations.
Citizen Liu's political and business links
Donghua Liu was granted New Zealand residency in 2005 against official advice by Labour Party minister Damien O'Connor.
Five years later, he was also granted citizenship against official advice after Maurice Williamson, Minister for Building and Construction at the time, lobbied on behalf of the property developer.
Maurice Williamson. Photo / Brett Phibbs
Mr Williamson asked his ministerial colleague Nathan Guy to process the case "as fast as possible", who then used his ministerial prerogative to grant Liu citizenship on December 16, 2010.
The following day, Mr Williamson conducted the VIP ceremony himself in his Pakuranga electorate office.
Mr Williamson resigned his ministerial portfolios last month after the Herald revealed he phoned a senior police officer about the domestic violence charges Liu was facing.
Prime Minister John Key said the MP for Pakuranga had "crossed the line", despite assuring him he did not intend to influence the prosecution.
"He [Mr Williamson] started by saying that in no way was he looking to interfere with the process," Inspector Gary Davey told his bosses in police emails released under the Official Information Act.
"He just wanted to make sure somebody had reviewed the matter to ensure we were on solid ground as Mr Liu is investing a lot of money in New Zealand." After his resignation, Mr Williamson said he made five or six calls to police each year on behalf of people who approached him.
In Liu's case he said: "There was no intention to do anything about screwing the outcome, but just to work out the focus of it. When I hung up I literally did not see that that was anything other than what a member of Parliament would normally do on behalf of somebody who had asked."
Liu was arrested after a domestic violence incident against his de facto partner and her mother at his Boulevard Hotel, Newmarket, in December. He has since pleaded guilty to assaulting a woman and assault with intent to injure and is seeking a discharge without conviction.
The 53-year-old businessman has attended several National Party fundraisers and one of his companies donated $22,000 to the party in 2012.
Liu opened the $3.5 million refurbishment of the Boulevard Hotel with Prime Minister John Key and Mr Williamson in time for the Rugby World Cup as the first stage of an ambitious project to rejuvenate the derelict site.
Nearly three years later, the four-star hotel is now a $400-a-week accommodation lodge and 20,000sq m of prime land behind it lies empty, with no resource consent applications lodged for the proposed hotel, apartment blocks and shops.
The proposed $70 million project at the former Carlton Bowling Club site stalled after Liu unsuccessfully lobbied three successive Immigration Ministers - again with support from Mr Williamson - to relax business immigration rules for wealthy foreigners.
Donghua Liu with Prime Minister John Key at the opening of the $70m Newmarket project.
Liu hired professional consultants to lobby the Government to lower the $10 million threshold that non-English-speaking applicants need to invest to qualify as business migrants. He said his plan was unlikely to go beyond the design stage unless the rules were changed to source capital from overseas, particularly China.
A policy change to relax the rules is still under consideration by the current Immigration Minister Michael Woodhouse, who met Liu at the Boulevard Hotel with Mr Williamson to discuss the policy as recently as April last year.
Mr Williamson also helped broker a deal in which Liu bought a beachfront property in Pauanui beside the MP's holiday home, as well as helping out with minor repair work while the businessman was away in China.
He has downplayed his relationship with the wealthy migrant, claiming they are not friends because they do not speak the same language - one of the reasons why citizenship officials recommended his application be declined.
Labour's immigration spokesman Trevor Mallard said officials should now review Liu's file, noting immigration officials now had power to deport people for such offences.
Mr Mallard said even if Liu had not been charged, his conduct meant he would have failed the good character test required to enter New Zealand.
"If this was put before [former Immigration Minister] Nathan Guy when he made the decision to grant citizenship, there was not a chance of getting citizenship."
Asked whether Labour was at fault for giving Liu residency, Mr Mallard said the case "did not reflect well on anyone".
But he said five years had passed between Liu's residency application and his citizenship application, and the National-led Government had plenty of opportunities to review his character.
Labour has hinted that it could change the Investor Plus scheme, in which foreign migrants paid $10 million for residency.
Mr Mallard said the requirements were too lenient, and controversial cases such as Liu's gave the impression that "New Zealand passports are for sale".
Real estate deals
From the Supreme Court of Chongqing:
*Ping Ma, Secretary of Tongliang County, Chongqing committee of the Communist Party of China, and his wife, Jianping Shen.
*Both arrested in September 2006 on suspicion of bribery and found guilty. Sentenced to 13 and three years in prison respectively.
*Involved in a number of real estate deals from Donghua Liu and his company, Chongqing Tianlong Developing Company, worth a total of $375,000.
*The couple purchased five units in a tower developed by the company and owed $25,000. The debt was waived.
*"Buying low, selling high". The couple signed a contract to purchase floor space in a commercial building for the "unusually low price" of $1800 per square metre - a total of $50,000 for 27.5 metres. The company purchased the shop space back for $100,000 - twice the original price - and a net benefit of $50,000.
*Jianping Shen signed purchase agreements with Liu's company for $112,500, when the market value was $412,500.
*Total benefit: $375,000
Read more
For more coverage of Donghua Liu click here.
