The $65m mortgage hanging over one of Bellevue Hill’s grandest mansions

A $65 million mortgage looms over a historic mansion in Bellevue Hill, one of Australia's most exclusive neighborhoods, linking it to a high-profile tax case involving billionaire Phillip Dong Fang Lee. The property, known as "Tokay," was built in the 1920s and has been owned by Helena Huiying Hu since 2001. Recent records show that Hu Property Investments Pty Ltd, a company associated with the estate, holds a loan from private lender Hygge Investment. The mortgage, which ranges in interest rates from 9.5% to 18%, is set to expire within weeks and is expected to be extended for another 12 months. Helena Huiying Hu, who is described as Phillip Lee’s former business partner in China, shares a history of intertwined business and financial dealings with Lee. Their relationship includes joint ventures and shared bank accounts in Australia. The mortgage on Tokay, while not directly tied to Lee, has drawn attention from the Australian Tax Office (ATO) during its ongoing investigations into Lee’s financial activities. These investigations began in earnest after allegations surfaced regarding Lee’s alleged tax evasion and complex financial arrangements. The ATO’s scrutiny of Lee dates back to 2021, when it issued freeze orders on multiple assets, bank accounts, and even a collection of luxury vehicles belonging to Lee and his wife, Xiaobei Shi. The investigation uncovered claims that Lee used sham arrangements to mislead authorities and channel substantial sums from China into Australian accounts and properties. According to a 2021 affidavit by a senior ATO official, Lee maintained secret control over businesses and financial interests in China, despite having previously stated to the Australian government that he had divested himself of these holdings. The affidavit further indicated that Lee structured his financial affairs to create the illusion that his mother and business associates were the actual owners of certain enterprises, while in reality, he retained operational and ownership control. This structure allowed Lee to obscure his involvement in various financial transactions, potentially evading regulatory oversight. Despite these allegations, the media does not confirm their validity, merely reporting them as part of the ongoing legal and financial proceedings. During the investigation, the ATO received warnings from AUSTRAC, Australia’s financial intelligence agency, about possible efforts by Lee and others to transfer assets out of the country. These concerns were raised amid the broader tax dispute, which has since reached a settlement. However, the outstanding tax liability remains unpaid, and the ATO continues to maintain control over several of Lee’s and Shi’s properties through a mortgage to the Commonwealth of Australia. This mortgage encompasses a range of properties, including farms and a bushland retreat on the Mid North Coast, an industrial site in Lane Cove West, and various residential properties across Sydney. Notably, it includes Felix Lee’s art deco apartment in Point Piper, which is owned by his mother, and the family’s Point Piper mansion, Mandalay, where the Prime Minister recently dined. While the ATO does not have a lien on the Bellevue Hill estate of Helena Hu, the property and its financing have been under close examination as part of the broader investigation into Lee’s financial affairs. Helena Hu reportedly informed the ATO that she was Lee’s business partner prior to his migration to Australia, where they co-founded Shanghai Shenfa Investments Co. In Australia, Hu and Lee are co-signatories on several bank accounts and have shared financial histories. The connection between Hu and Lee, along with the mortgage on Tokay, highlights the intricate web of financial relationships that have come under scrutiny in the ongoing tax dispute. As the mortgage on Tokay approaches its expiration date, the situation remains fluid, with potential implications for both the property and the broader financial landscape surrounding Phillip Dong Fang Lee.