China chasing millions in NZ

Millions of dollars embezzled in China may have been laundered through New Zealand.

The Chinese government is trying to retrieve money and assets invested in New Zealand as part of what it believes was a "trans-national money laundering scheme" run by Liu Guiting, the former head of China's first publicly listed rail company, the Sunday Star Times reported today.

Guiting gained New Zealand residency in 2002 after he deposited $2 million in an ASB bank account and bought property here through companies belonging to his wife and daughter.

He is now serving two life sentences in China after being convicted last year of misappropriating about $21m of public funds, but the Chinese government believes he could have embezzled up to $500m.

Guiting's wife, Limin Yang, and daughter, Jasmine Liu, live in Auckland and are under investigation for suspected money laundering, according to Chinese justice ministry documents.

On Friday Yang appeared in the High Court at Auckland in an ongoing civil case she has brought against Paul Chen, a former business partner she says breached fiduciary duty and misappropriated assets of her companies.

Chen is being held in China as a witness against Guiting.

A Chinese government lawyer sat in on the hearing and confirmed that his government was interested in learning what happened to the stolen rail company money.

Up to $13m may have been invested in New Zealand. In court, Yang confirmed her husband had transferred money to New Zealand that was used to purchase an $810,000 apartment in Albert St, Auckland, and $2m to buy the Kiwi hotel and three other properties in Rotorua.

Under cross examination she said she did not know exactly where the money came from.

An affidavit to the court says that the Chinese ministry of justice wished to interview Yang and her daughter "over the evidence which has been uncovered linking them to the movement and control of the missing money".

It is understood moves are under way to have Yang and Liu extradited to China under a mutual assistance agreement.

Under the same agreement New Zealand police have been trying for a year to track down Leo Gao and Kara Hurring with the help of Chinese officials, after the pair were believed to have fled to Hong Kong.

Rotorua service station owner Gao was mistakenly given a $10m overdraft by the Westpac bank. They were able to take up to $4m out of the country.

- NZPA