Updated ,first published
If Felix Ming Ze Lee, the 25-year-old son of beleaguered billionaire businessman Phillip Dong Fang Lee, is wondering what else could go wrong this week, members of the Terrey Hills Golf and Country Club have bad news.
As former Victorian premier Dan Andrews checked out the championship course earlier this week, more than 100 members of the privately owned, Lee-family controlled championship golf club have threatened legal action against the management amid claims of oppressive conduct and excessive annual subscription fee rises that they say are in breach of the club’s constitution.
Fuelling heightened animosity among some members are falling resale values of membership shareholdings, and new joining, administration and registration fees, prompting members to describe it as now the only decent golf club in Sydney with a “waiting list of sellers”.
The mutiny of members from the prestigious course caps off a tumultuous week for the young businessman. It started with dinner with the prime minister, only to be overshadowed days later by revelations about damning allegations from the tax office about his father’s “sham” financial arrangements to funnel huge sums of money from China to Australia.
An exhaustive investigation into the financial affairs of Phillip Lee has not only shed new light on the previously opaque origins of his wealth, but also included suspicions that the family patriarch continued operating his businesses in China decades after he told Australian authorities he had sold his business assets in China.
“The [tax] commissioner believes that Mr Lee still has business and financial interest in the PRC [People’s Republic of China], notwithstanding his previous representations to the Australian government as part of his application for migration that all of his businesses in the PRC were sold,” states the tax office affidavit.
Further, “those businesses appear to be held in structures which mask Mr Lee’s true ownership and control of those assets. In particular, the commissioner believes that Mr Lee has structured his financial affairs in such a way as to give the appearance that his mother and business associates are the owners of businesses which are in truth operated and owned by him”.
Felix Lee has sought to distance himself from his father’s business and financial affairs in recent years, founding the Lee Family Office, and inviting former federal treasurer and ex-ambassador to the United States Joe Hockey on as chairman.
Felix Lee declined to comment in response to questions about the tax office’s damning allegations about his father. “Phillip Lee’s tax affairs are his own and are not related to Felix Lee,” a spokesperson said on his behalf earlier this week.
In response to inquiries about the legal letter, a spokesman for the club’s management said both parties are communicating in relation to their clients’ respective asserted, but contested, positions.
“The board has received legal correspondence, has considered the allegations carefully, and through its legal representatives has responded comprehensively, rejecting the allegations made,” the spokesperson said. “The company maintains that it has acted lawfully, in accordance with the club’s Constitution and its directors’ duties.”
Central to Felix Lee’s responsibilities in recent years has been the Terrey Hills Golf and Country Club, a prestigious championship course purchased by his parents from a syndicate of Japanese investors a decade ago.
Felix Lee was appointed director in November 2020, a few weeks after his 20th birthday, and more recently elevated to chairman. Fellow board members include his uncle Victor Lin, known among members as a passionate golfer, and Felix’s younger brother Edward Feng Zhao Lee, who was appointed early last year soon after his 19th birthday. Felix’s mother, Xiaobei Shi, stepped down early last year.
Former club member George Kalil didn’t know who Felix was when he first met him at a committee meeting at the club in about 2023, but he hasn’t forgotten it.
“Felix Lee came in, unintroduced and totally unknown to me and other committee members,” Kalil said. “I thought he was there to take the coffee order, but he wasn’t the new waiter. He was Phillip Lee’s son, and he just launched into a tirade saying ‘you guys have to know your place’.”
As Kalil and others understood it, things were set for a shake-up at the club. Among the changes, a member-elected committee was abolished three years ago and replaced with an advisory panel appointed by the Lee family directors.
While the original committee structure ostensibly allowed members some oversight of the club’s financial governance, the new advisory panel did not, according to members.
A spokesman for the board said it believes the current structure improves effective member engagement because it has invited a more diverse cross-section of the membership base, including women, those with different playing skills and members who previously did not feel their views were being heard.
The members’ letter claims annual subscription fees have risen well beyond what they claim is the club’s constitution’s mandated cap of 5 per cent a year to total more than 20 per cent in the past two years.
The board rejected the claims of a constitution cap of 5 per cent on annual fees and said it wasn’t responsible for changes in membership resale values. “Subscriptions are determined depending upon working capital and expenditure of the club from time to time.”
Claims from the membership that the board has imposed new member joining fee, administration fee and registration fee when a member tries to sell and transfer their shares were also rejected by the board, instead stating that the joining and administration fees have been in place since about 2000.
In correspondence seen by this masthead, a founding member was revealed to have waited a year with no buyers before he recently sold his membership for $12,000, less than the club’s new joining fee of $12,500.
One of the members who is currently on a waiting list to sell their stake in the club is James de Stigter, who paid about $45,000 to join. After injury left him unable to play for the past 18 months, he put his membership up for sale and expects it to sell for about $9000.
After Stephen Schinagel’s wife Heather Mead died, he made inquiries about putting her membership up for sale and was told late last year they were selling for about $20,000. It was a dramatic loss on the $65,000 she paid in 2017. It has since been discounted to $15,000 in a bid to hasten the process.
“The market value of memberships is influenced by a range of factors, including broader economic conditions, discretionary spending, and market demand, and risks associated with membership were well documented in the several company prospectuses,” the spokesperson said.
Members were hoping to flag their concerns at the annual general meeting held June 30, in particular about why annual fees increased given a $7.2 million cash reserve held by the club, but the opportunity never arose.
Having opened the meeting, Felix Lee promptly announced there would be no dividend declared, and closed the meeting. Two minutes later, it was all over.
Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.
Lucy Macken is an investigative reporter for The Sydney Morning Herald.Connect via X or email.From our partners
Discover more from PressNewsAgency
Subscribe to get the latest posts sent to your email.