Australian Surgeon Robbed, Framed, and Jailed in China

Lin Dong, as CEO, gave a speech at a China Biologic event before his past was uncovered and he broke contact with the company. (ctbb.com.cn)

After a decade as a surgeon in Australia, Du Zuying attended a meeting held in Beijing in August 2000 by the Overseas Chinese Affairs Office of the State Council. It was chaired by Vice Premier Li Lanqing, and featured 63 other successful Chinese professionals living outside China. Du was so moved by the proceedings that he made up his mind right then to “repay the homeland, return to my country, and begin a great undertaking.”

Now he sits in a Chinese prison cell with a bad heart condition, while the government of the country he came to serve has shown little interest in his plight.

China has a very bad record with the safety of blood transfusions, and Du claimed to have a way to treat blood plasma to ensure its safety. His return to China seemed to offer a chance for Du to make money, while doing good for his native land.

But while attempting to commercialize his patent, Du had the equity in his Chinese company stolen from him, and after trying to obtain relief was framed and jailed.

The Australian government hasn’t shown sufficient mettle in securing his release, according to some observers. The Department of Foreign Affairs and Trade (DFAT) has made representations to the Chinese regime about Du’s treatment, but observers say a more assertive approach is called for.

“To refrain from unequivocal objection to the treatment of Du in this case is gutless and a betrayal of an Australian citizen,” wrote Paul Monk, a Melbourne-based public intellectual and analyst of China, in an email.

DFAT said through a spokesperson “We can assure you that consular officials have been providing him and his family with a high level of consular support,” as well as raising concerns with the Shandong High Court about the delay in Du’s case.

The backstory to how Du, a 60-year-old former surgeon, got into a bad business deal in China and eventually wound up in jail, is tortured and complex.

‘All Crooks’

The detailed story of Du’s business dealings and how he was fleeced is presented in legal documents and briefs prepared by his lawyer and shown to The Epoch Times.

Other parts of the story were told, based on an exhaustive review of Chinese primary sources, by the short seller Worthless Pennies.

Worthless Pennies is a pseudonym of Jon Carnes, most well known as Alfred Little, an investor who for several years has been short-selling Chinese companies he accuses of fraud.

“Our opinion was that China Biologic was all crooks,” Carnes said in a telephone interview, adding that he was agnostic about Du’s claims.

A report prepared by Carnes depicts a company with an inglorious past. The primary operating, 100 percent controlled subsidiary of China Biological in China, a company called Shandong Taibang, was founded with stolen seed money by a known criminal by the name of Zhang Xiaowei.

Zhang had run an investment vehicle that was effectively a Ponzi scheme, from which he siphoned capital to Shandong Taibang; he also loaned Du 20 million yuan (US$3.2 million) that he had laundered through Hong Kong, so Du would have a 25 percent stake in a subsidiary of China Biologic, according to Carnes’s report.

It is unclear whether Du knew about the origin of the money he was lent.

The other 41 percent of Du’s full claimed 66 percent ownership stake in Shandong Taibang came from a four-shareholder deal made between 1) Du Zuying, 2) Shandong Missile Engineering, a company controlled by Du, 3) a company controlled by Zhang Xiaowei, which also used stolen money, and 4) a Shandong state-owned research institute.