INVESTIGATIVE JOURNALIST | SYDNEY
Investigative journalist specialising in corporate malfeasance and corruption.
BCom (Accounting & Finance), BA (Journalism), Diploma of Financial Planning
How China's Virgin Australia sold out the national interest
Anthony Klan | 30 June 2020
China's Virgin Australia ran a highly sophisticated campaign to corrupt media and mislead Australian public. Source: supplied
Virgin Australia, under current CEO Paul Scurrah, ran an elaborate scheme on behalf of its owners to mislead the Australian public and the nation’s politicians in a secret operation - which included aggressively muzzling the media - to set up a massive infrastructure project one hour’s flight time north of Sydney.
The 90%-plus foreign-owned Virgin Australia, on behalf of its two Chinese owners, the notorious HNA Group and Nanshan, who own and control at least 46% of the company, actively masked their activities from both the NSW and federal governments, in a move which also hid the operation from the public.
(Bank of America, Morgan Stanley and other major corporates have refused to do business with HNA Group because of its opaque structure - they simply don't know who they are dealing with; while Nanshan has allegedly "been at the centre of illegal land seizures", the "forced demolition of homes" and has "used violence against those who dared to stand in its way").
When the secret activities of Virgin Australia were exposed, the airline, under CEO Scurrah, successfully shut down any further media coverage and lied about their activities.
Virgin Australia, in formal written responses, labelled any scrutiny of what they were up to as “xenophobic” - a notorious fall back of the Chinese Communist Party.
Major Virgin owners HNA Group - which is now 100% controlled by the Chinese government - and Nanshan, which bought into the airline at the same time and whose owner is a long time Communist party apparatchik, had arranged to create the nation’s biggest flight training school in Tamworth NSW.
The project was massive - far bigger than any other flight school in the nation - and the mega-project had been launched at a secretive Chinese-language only media event in Sydney.
A press statement, first published in Mandarin, announced that the project was a done deal, and that the massive flight school was the first in Australia to be approved by the Chinese Communist Party.
After a contact alerted me to the story - months after the press conference - I was dumbfounded and approached Virgin Australia.
The airline denied having anything to do with the project.
This was blatantly untruthful.
One of the presenters on stage at the Sydney launch event was Virgin Australia senior executive Peter Cai.
At the time I was working for The Australian newspaper as a long-time investigative journalist.
I was gobsmacked and knew this was a page one story.
My immediate editor agreed and everything swung into motion.
The story was placed high up on the story list to run on page one.
During the afternoon of Thursday 21st March last year, something changed dramatically.
I later learned this - at the very least - involved direct interference from the office of NSW Liberal Premier Gladys Berejiklian.
The newspaper now wanted nothing to do with the article.
Late in the evening of Thursday 21st March, deputy editor James Madden told me it was a case of there being too much news around and it was “squeezed out” of the paper.
This struck me as highly unusual.
The following morning, in the office at around 6.30am, I filed the story to the online news desk.
The article had already passed the lawyers, been checked and approved by the subeditors, and was ready to go.
The online editor came by my desk and asked if I was sure I wanted the article to run online - it was a very strong piece which would otherwise run very prominently in the print edition of the paper.
I responded that I was well aware of this - but that the editors weren’t interested in it.
I had endless other stories to work on and I wanted to move on.
The story was published online and, unsurprisingly, was a major hit.
It was shared widely and other media outlets, including Sydney radio station 2GB, jumped on the story, similarly amazed at how remarkable it was.
Prominent aviator and former chairman of the Civil Aviation Safety Authority Dick Smith called me in a rage.
He simply couldn’t believe the news.
He is one of the most connected people in Australian aviation and he knew absolutely nothing about it.
Smith is not unknown for the odd bout of hyperbole, but this was something else.
There needed to be a thorough, high-level investigation and the story demanded maximum coverage.
I told him he was spot on.
I told him to call editor of The Australian John Lehmann and to tell him exactly what he had just told me (but to keep it to himself that I had suggested doing this).
I did this because I too, was completely dumbfounded by what was going on.
The same morning I had put in a call to the office of Barnaby Joyce, the local federal member for New England, where Tamworth sits, and I had received a response back.
He was aware Virgin had planned to build a flight school at Tamworth - this was common knowledge and presented some good news for the local economy.
But despite it being in its final stages of approval, he too knew absolutely nothing about any involvement of major Chinese government-linked conglomerates.
This was a great new online “top” to the hugely popular and well read story.
But not a word of it was published - and the paper hasn’t run a single word on any of it since.
The decision to not run the story had nothing to do with space.
On the morning of Friday March 22, shortly after the piece was run online, Lehmann, on a day off, called the the online desk - part of the “backbench” - and told them that not another word that I filed could be published without senior editors approving it first.
I was deeply concerned - not least because of the major concerns key security figures had repeatedly warned about regarding Chinese Communist Party interference, including in the media.
A message had been left on my desk phone.
It was from Berejiklian's office, a staffer called Miles Godfrey.
I called him back.
The conversation was circuitous and became heated.
He was doing everything he could to say the information “wasn’t a story” and to play it down.
Then, at the end of the conversation, he let slip: “Well just so you know I’ve spoken to John Lehmann”.
I was outraged.
Here was a PR for the NSW Premier going behind my back and calling the editor directly to have my extremely important story killed.
And it had worked 100%.
My immediate boss overheard our (loud) conversation.
He came up to me shortly afterwards and said not to fight with Miles Godfrey as “he’s going to be your boss on Monday”.
A week later Godfrey was deputy national chief of staff at The Australian.
I spent the next two days filing and refiling, over and over, the new information and follow-up stories.
I cc’d every one of the paper’s editors in the exchanges, which were principally with Madden.
There was always some “problem” with the piece.
No other editor engaged.
I subsequently learned of even more distressing information about Chinese government links to the secret Virgin deal.
Lehmann’s The Australian refused to publish a word of it.
I continued pushing the matter for several weeks and was repeatedly attacked by my immediate editor for refusing to let the matter go.
It culminated in my resignation.
I’m raising this because ABC’s 4 Corners ran a lengthy story on Virgin Australia last night and didn’t once touch on any of these serious issues surrounding the company, which, right now, could not be more in the national spotlight.
I found this deeply disappointing.
There is more, very serious, information to come.
You will find it here.
Anthony Klan is an investigative journalist specialising in business malfeasance and government corruption. His work has sparked numerous inquiries and law reforms. He holds Australia’s top journalism award, a Walkley Award, for business journalism, and has been named a finalist for the Graham Perkin Australian journalist of the year. He has won News Corporation Australia’s top award and has been named News Corporation Australia business journalist of the year on three occasions. In 2016 he was named a finalist in both the investigative and business categories of the Society of Asia Publishing Awards and a finalist for the NSW Kennedy Award for Outstanding Financial Journalism.
News Corporation Australia journalist of the year, Sir Keith Murdoch Award for Excellence in Journalism, 2010; (finalist) 2018
Walkley Award for Business Journalism, all media, 2007
Graham Perkin Australian Journalist of the Year, (finalist) 2010
News Corporation Australia Business Journalist of the Year, 2007; 2011; 2014
News Corporation Australia Business Journalist of the Year (highly commended) 2009; (finalist) 2016; (finalist) 2018
Citi Journalism Award for Excellence, Personal Finance, 2015
Citi Journalism Award for Excellence, Broadcast (finalist) 2016
NSW Kennedy Award for Outstanding Investigative Reporting (finalist) 2015
NSW Kennedy Award for Outstanding Finance Reporting (finalist) 2015; (finalist) 2016
Society of Publishers in Asia (SOPA) Excellence in Investigative Reporting (finalist) 2016
Society of Publishers in Asia (SOPA) the Scoop Award (finalist) 2016
Best News Journalist, IT Journalism Awards 2018