A Melbourne man who claimed that a Chinese Communist Party (CCP) operative approached him to run for the Liberal Party in the federal seat of Chisholm was in jail in October 2018 when preselection was held.

Bo “Nick” Zhao, 31, told the Australian Security Intelligence Organisation about a year ago that he had been offered $1 million by Melbourne businessman Brian Chen to run for preselection in Chisholm, according to reports by the Nine Network.

He was found dead in a motel room in March.

Neither the Nine Network nor ASIO, which is investigating the allegations, confirmed when the approach to Mr Zhao was said to have taken place.

But previously unreported details about the final year of Mr Zhao’s life reveal that if he was approached to run for the Liberals it was highly unlikely that it was to contest the 2019 election.

These details – gleaned from court records and sources familiar with Mr Zhao’s case – show the depths of the personal crisis he found himself in when he decided to approach ASIO.

ASIO appears to believe Mr Zhao is credible, despite his history, and are investigating the extent of Mr Chen’s attempts to cultivate sources in Australia, where he has worked and lived at various stages since at least 2006.

Federal MP Gladys Liu – who has also faced scrutiny about possible links to the CCP – was preselected by the Liberal Party to replace Julia Banks as the candidate in October last year, and was elected in May.

Mr Zhao, who reportedly joined the Liberal Party in 2015, may have been approached to contest preselection later that year, but fellow Chinese-Australian Liberal Party member Scott Yung said he did not believe Mr Zhao was ever “active” within the party.

It was also unlikely Mr Zhao was approached to contest earlier elections, given he was not a member.

Australian Strategic Policy Institute analyst Alex Joske said it was also possible any approach made on behalf of the CCP was part of a long-term strategy, rather than to target any particular election.

Zhao faced fraud charges

Court records confirm that from May to November last year he was remanded in custody awaiting trial for a string of serious fraud-related offences.

After spending six months in jail, Mr Zhao was bailed to live at his house in the eastern suburb of Glen Iris last November.

But he was still facing serious criminal charges at the time he reportedly made contact with ASIO, and was due to face trial in the Melbourne County Court the same week that he died.

The circumstances of the death will be investigated by the coroner.

Zhao admitted giving false evidence to Melbourne court
Mr Zhao was charged with obtaining almost $1.5 million by deception during his ownership of several car dealerships around Melbourne between 2015 and last year.

Last November, he pleaded guilty to two charges of perjury, admitting that he provided false evidence to the Supreme Court in a civil case involving Volkswagen which was related to the criminal matters.

While Mr Zhao’s background is likely to be seized upon by China as evidence that Mr Zhao’s claims cannot be believed, it could also indicate that he was perfect for CCP cultivation, Mr Joske says.

“We [suspect] that China hacks personal records from governments in order to work out who is in financial distress, because that’s who they target for cultivation,” Mr Joske said.

He says it is even possible that details of Mr Zhao’s finances were obtained by the CCP prior to the alleged approach being made.

Court documents seen by the ABC show Mr Zhao claimed he had a controlling interest in seven car dealerships across Melbourne, including two in the prestigious suburb of Brighton, shortly before he was charged with criminal offences.

His criminal charges related to allegedly producing false invoices regarding the sale of 10 luxury vehicles including Porsches, BMWs and a Range Rover to obtain credit from Westpac.

ASIO investigating spy claims

On Sunday, ASIO took the unusual step of releasing a statement confirming it was investigating the claims of Mr Zhao, and those of another man who said he was a former Chinese spy.

“Australians can be reassured that ASIO was previously aware of matters that have been reported today, and has been actively investigating them,” Director-General Mike Burgess said.

“However, in accordance with long-standing practice, I will not comment on this particular operational matter, including any detail of the individuals involved.

“Given that the matter in question [Mr Zhao’s death] is subject to a coronial inquiry, and as not to prejudice our investigations, it would be inappropriate to comment further.”

When asked in a regular press briefing on Monday night, Chinese Foreign Ministry spokesman said reports of increased spy infiltration in Australia were “nothing but lies”.

The ABC was unable to contact Mr Zhao’s wife, who reportedly separated from her husband in the months leading up to his death.

The ABC was also unable to contact Mr Chen, whose Chinese name is Chen Chunsheng.

The Nine Network reported on Sunday that he denied knowing Mr Zhao or having any involvement in Chinese intelligence activities.

-ABC