THE man at the centre of the recent allegations by Nine newspapers and 60 Minutes, in which it was alleged that he was offered $1 million by the Chinese government to become a Liberal member of federal parliament, lost his Volkswagen dealership at Werribee in Melbourne’s fast-growing west after VW cancelled his franchise alleging misbehaviour.

Bo (Nick) Zhao was named in the media as being subject of an alleged attempt by the Chinese government to fund him into winning a seat in federal parliament with the expectation that he would become ‘China’s inside man’ in Canberra.

The 60 Minutes program and Nine’s newspapers said that Mr Zhao reported the approach to ASIO and that in March he was subsequently found dead in a hotel in Glen Waverley .

The cause of his death has yet to be established by an inquest although police sources have told The Australian that they suspect the cause of death was an accidental overdose and that they do not suspect foul play.

Mr Zhao’s time as a VW dealer was very short-lived.

As reported in GoAutoNews Premium, he bought Werribee Volkswagen in June 2017 for $2.8 million but the business soon hit trouble when, by September, Volkswagen Group Australia (VGA) had called in the owners alleging misconduct in relation to the sale of cars to third parties in other states who, VGA alleged, proceeded to on-sell them.

Mr Zhao, who denied any misconduct, won a one-month order to restrain VGA and its finance arm from proceeding with any steps that would effectively close the business from under him.

But, in the Supreme Court of Victoria, Justice Vickery subsequently threw out the injunction which allowed VGA to proceed with the process of appointing new management to the Werribee dealership.

A VGA statement said: “Information obtained by VGA, since the injunction was given by the court, confirmed that termination of the franchise was justified and that there was no basis for the injunction.”

In dismissing the proceedings, Justice Vickery dissolved the injunction and ordered Mr Zhao to pay VGA’s legal costs. He froze Mr Zhao’s assets to the value of $200,000 subject to depositing that amount with the court.

Justice Vickery said the court would ask the police, the Australian Securities and Investments Commission (ASIC) and Consumer Affairs Victoria “to consider taking action against Mr Zhao resulting from his conduct in these court proceedings, including the sworn evidence that he gave to the court”.

VGA managing director Michael Bartsch said after the hearing: “VGA does not consider Mr Zhou a fit person to hold our franchise.”

“VGA will work to ensure a smooth transition to new ownership and to minimise inconvenience to our customers,” Mr Bartsch said.

The Werribee dealership was subsequently put into the care of the Rex Gorell Group which has 14 franchises, including Volkswagen, in Geelong.

The Geelong-based group had stepped in to run Werribee Volkswagen, which had been without an operator after the legal action mounted by VGA in 2017.

However, earlier this year, Japanese car retailer IDOM, which operates in Australia as the DVG Group, took over Werribee Volkswagen which had by then been renamed Gateway Volkswagen.

The move follows IDOM’s purchase of Andrews & Wallis dealerships in nearby Essendon Fields.

In October last year, IDOM paid about $70 million for Andrew & Wallis Group, based in the Essendon Fields airport auto retail centre in Melbourne’s north. It added seven franchises – Honda, Mazda, Toyota, Jeep/Chrysler, Alfa Romeo, Fiat and Isuzu Ute – to IDOM’s portfolio.

The franchises are on four sites in Wirraway Road, Essendon Fields: Essendon Honda, Essendon Mazda, Airport Toyota, and Essendon Jeep & Chrysler and Essendon Isuzu Ute on the same site.

The purchase came three years after IDOM paid about $121 million for 67 per cent of WA-based DVG Automotive Group, the second biggest retail operation in the state behind what was then the Automotive Holdings Group (AHG).

By John Mellor