The Northern Territory Government is refusing to reveal the costs of its partnership with a Chinese airline, saying it was not aware its owner was recently named in court hearings over the alleged bribing of a government official in Hong Kong.
According to Hong Kong court records, it was alleged a company controlled by Donghai Airlines chairman Wong Cho-Bau paid more than $650,000 to renovate a luxury penthouse owned by then-Hong Kong Government chief executive Donald Tsang.
In exchange, it is alleged permits were approved for another company Mr Wong holds shares in, radio company Wave Media.
Donghai Airlines’ parent company is East Pacific Holdings, the company which operated the building that housed the penthouse.
Mr Tsang was investigated by Hong Kong’s Independent Commission Against Corruption and sentenced to 20 months in jail last year for not disclosing private negotiations with Mr Wong over the sale of the penthouse.
A Hong Kong ICAC statement from February 2017 said Mr Tsang was convicted because he “wilfully misconducted himself by failing to declare or disclose to, or by concealing… his dealings and negotiations with Wong Cho-Bau, the major shareholder of Wave Media Limited, in respect of a three-storey residential property situated at East Pacific Garden in Shenzhen.”
A retrial was ordered on the bribery allegations, which ended in a second hung jury last September, with no convictions.
Mr Wong was never charged over his involvement.
Mr Tsang was convicted over concealing dealings with Mr Wong regarding an apartment in Shenzhen. (Supplied: Flickr)
NT ‘not aware’ of allegations
Tourism Minister Lauren Moss began negotiations with Donghai Airlines in early 2017, and finalised the confidential NT Government partnership earlier this year.
Chief Minister Michael Gunner was photographed with Mr Wong at the Darwin Airport on Wednesday during the inaugural Shenzhen flight celebrations, where the two men flashed the thumbs-up sign.
A Government spokeswoman said the NT Government was not aware of Mr Wong’s alleged involvement in the bribery allegations.
“Donghai Airlines approached the Northern Territory Government via NT Airports,” she said.
“A key reason for Donghai Airlines considering the NT was because Darwin is the only Australian destination within range of its current 737-800 fleet.
“The Department of Tourism and Culture undertook due diligence in relation to the Donghai Airlines opportunity as would be the case for any new airline route into the Northern Territory.
“It was fully reviewed and scrutinised by the formal Finance Risk and Audit Committee of Tourism NT before being approved.”
Acting Department of Tourism CEO Michael Tennant said in a statement that he too was unaware of the allegations before entering into the partnership.
“The allegations against Mr Wong are completely separate to the delivery of the Donghai Airlines service into Darwin,” he said.
“The NT Government was not aware of these allegations.”
Flights heralded as tourism coup
The Labor Government has heralded the flights as a major coup that will attract tens of thousands of Chinese tourists to the NT every year.
But they have declined to disclose how much Territory taxpayers are paying for the partnership with the airline and for how long the agreement will run, citing commercial in confidence reasons.
Previous subsidy agreements between the NT Government and private airlines have been worth millions.
Charles Darwin University law lecturer and former Labor MLA Ken Parish said there was a long history of the NT Government unsuccessfully paying airlines to service Darwin.
That included the CLP giving Air North $700,000 to run the Darwin-Alice Springs “milk run” in 2015, and the previous Henderson Labor Government giving Jetstar $3 million to establish an international hub in Darwin, and another $2 million for marketing the routes in 2009.
Jetstar dumped the routes four years later.
Mr Parish said he does not buy the Government’s line that the total cost is commercial in confidence information.
“Given the chequered history of NT Government subsidies to airlines, it should be obvious why there is a strong public interest in knowing how much taxpayer’s money is being paid and what guarantees there are that Territorians will get value for money,” he said.
“They can redact any commercial in confidence bits.
“We need and are entitled to information about how much of our money the NT Government is giving to it as an inducement to fly here.”
Government will not reveal cost
In a release earlier this year the NT Government said it had set aside nearly $11 million for “cooperative marketing with domestic and international airlines” this year.
Mr Parish said he expected most of that to flow to the Donghai arrangement.
A Government spokeswoman told ABC Radio Darwin the NT Government was not directly funding Donghai Airlines, but declined again to offer a total.
“This funding goes direct to third parties that support marketing packages, [for example] creative development or media buy, not to the airline itself,” she said.
“A portion of the funding is for trade [familiarisation] programs which are co-funded between the NT Government and Donghai Airlines.”
An official NT Government delegation spent five days in China last week and flew back on Donghai’s inaugural flight to Darwin on Wednesday at a cost of nearly $30,000.
An NT Airports spokeswoman said a former airport executive first contacted Donghai Airlines in late 2016 to discuss flight possibilities while on a business trip to China.
Donghai Airlines representatives were contacted for this story but did not respond.