Chinese firm holds Aussie tax secrets

 

Exclusive: Millions of Australia's tax and company files are being held by a Chinese-owned centre, with the Government agencies struggling to find a new home for its servers.

As detailed yesterday, the Defence Department was told in 2016 by then treasurer Scott Morrison it had to look for alternatives after Global Switch (GSU) data centre was sold off to a Chinese data firm.

There were fears Australia's sovereignty and secrets were at risk by the sell off, from a United Kingdom consortium to one in China, whose State hackers had already been targeting Australia's servers.

But Defence only managed to remove some of its classified documents and was forced to re-sign two new multimillion-dollar contracts with the Chinese company for another five years from 2021, as it struggled to move all its assets out.

 

Chinese-owned data centre Global Switch in Ultimo, Sydney, which includes millions of tax and company files held by the ATO. Picture: Supplied
Chinese-owned data centre Global Switch in Ultimo, Sydney, which includes millions of tax and company files held by the ATO. Picture: Supplied

 

Now it can be revealed data stored at the China-owned Global Switch includes millions of tax and company files held by the Australian Taxation Office (ATO), and the Australian Securities and Investments Commission (ASIC).

Global Switch, a high security data firm had been fully owned by Aldersgate Investments, run by British Indian-born billionaire private equity brothers David and Simon Reuben but they sold half the company to a Chinese consortium made up of data and steel companies in 2016 for $4 billion cash; sold off another percentage in 2018 and in September 2019 sold off the last of their interest for another $3 billion to China's steel giant Jiangsu Shagang Group which part owns Australian iron mining giant Grange Resources.

It is China's largest privately owned enterprise whose chairman Shen Wenrong had been a deputy for the Congress of the Chinese Communist Party.

There is no suggestion of wrong doing.

 

Shen Wenrong is a Chinese steel magnate and controls the Jiangsu Shagang Group. Picture: Supplied
Shen Wenrong is a Chinese steel magnate and controls the Jiangsu Shagang Group. Picture: Supplied

 

The ATO said yesterday migrating its files was a "large and complex" operation that started in 2017.

"The ATO is well progressed in the migration of its systems out of the GSU data centre. To ensure system security and stability for the community the migration is being done progressively, with completion expected by early 2022," a spokeswoman told News Corp Australia.

In a lengthy statement, the Department of Defence Secretary Greg Moriarty stated: "Australians [could] be assured that Defence's data is safe."

Control and access of the Defence data stored at Ultimo "remains under full operational control of the Australian Government," he said. "All of the most sensitive data was removed from this facility in May 2020."

Meanwhile, an ASIC spokeswoman said: "ASIC's contract with Global will expire in August, 2023," adding it would begin migrating data this year.

GSU said yesterday there were no security risks for its operations and it had no access to customer data, as it was essentially a storage warehouse.

Sources linked to the government data storage agreed Global Switch was one of the best in the business and moving out was a complex process.

"But it's more a perception thing of who holds our sensitive data, in this case a firm from China, but otherwise it's as secure there as anywhere," an insider said.

A majority of government agencies, including the ATO in a $73 million deal signed last year, now hold or will hold its data with Canberra Data Centres (CDC) in the ACT and Sydney's west; but concerns have been raised about this too since it carries a high concentration of sensitive national data.

Originally published as Chinese firm holds Aussie tax secrets