A former council manager tasked with pursuing a billionaire property developer over environmental damage to hundreds of hectares of natural bushland has turned up on the billionaire’s payroll.

Council administrator Glenn Handford​ was general manager at MidCoast Council on NSW’s north coast until less than a week before Christmas when he suddenly resigned amid widespread rumours he was going to work for wealthy Chinese property developer Phillip Dong Fang Lee.

Mr Lee is a road construction and urban developer from China who made property headlines in 2015 when he and his wife Shi Xiaobei bought the Point Piper trophy home Mandalay for $39.9 million, and whose company, Tea Gardens Farms, purchased the 400-hectare bushland and marine reserve at Fame Cove on the state’s north coast for $8.8 million in 2006.

Mr Lee’s environmental record goes back to 2009 when his Tea Gardens Farms was fined almost $200,000 after sediment-polluted water on his Fame Cove property flowed into North Arm Cove after a dam wall failed during excavation work.

In 2014 there was an $8000 fine after a section of bushland was cleared and the felled trees left in a protected marine sanctuary.

Earlier this year Mr Handford denied the rumours that he was leaving the council to work for Mr Lee, and issued a statement to say his resignation follows “an offer in the private sector”, but it wasn’t enough to stop growing consternation among state MPs.

NSW Labor MP Kate Washington first flagged her concerns that Mr Handford was working for Mr Lee in April when she said in parliament: “If this is true, they are serious issues that warrant scrutiny, especially given the decade-long history of environmental infringements by Mr Lee.”

Greens MP David Shoebridge also raised the issue from the floor: “Locals are worried that Mr Handford … has jumped from council to developer, from gamekeeper to poacher. Given the history they are right to be worried.”

This week Mr Handford confirmed that that approach from the private sector had come from Mr Lee and that he has been representing Mr Lee’s interests in the local community since June.

Despite announcing his resignation on December 21, Mr Handford did not leave council until a month later.

“As a private citizen I’m entitled to do what I like,” Mr Handford said. “At the time the offer [of employment] was made I was suffering burnout from the merger of [Gloucester Shire, Great Lakes and Greater Taree City councils] and I realised there are options out there for me out of council.”

Local councillors are outraged at the lack of transparency in Mr Handford’s relationship with local property developer Mr Lee.

“There are a lot of questions that need to be answered, like who managed the relationship between Mr Lee and council over the three months before Mr Handford resigned?” said councillor Peter Epov.

Fellow councillor Kathryn Bell put her concerns about Mr Handford’s shock resignation into writing when it became obvious that, despite announcing his departure in December, he continued to work at council until late January.

Mayor David West said this week’s revelation “leaves me with a very sour taste in my mouth”.

“If I had known at the time that the former general manager was associated with Mr Lee, I would have taken action,” he said.

This isn’t the first time Mr Lee has hired from the ranks of council. Council’s investigations and prosecutions coordinator Greg Pevitt expressed concern at Mr Lee’s tree-clearing after the 2014 incident, but six months after he resigned in early 2016 he went to work as an adviser for Mr Lee’s company interests.

In the latest stoush over environmental destruction at Fame Cove, lawyers for Mr Lee’s Tea Gardens Farms consented to Land and Environment Court orders requiring the rehabilitation of the bushland by late 2020, and agreed to pay council’s legal costs but not staff costs.

The court’s rehabilitation orders are being overseen on behalf of Mr Lee by strategic planner Stuart Murray, of SiteR&D, who also worked at Great Lakes Council in the mid-1990s.

Mr Handford said this week he was not involved in the settlement between council and Mr Lee’s lawyers last year, even though he was present at least one mediation meeting between all parties. His signature is on the settlement orders.

“On a further note, since resigning from council I have not had any contact with council or council officers concerning Mr Lee’s work,” he said.

Exacerbating tensions within council comes the shock forced redundancy of director of planning and natural systems Lisa Schiff earlier this year with strict confidentiality orders over the terms of her departure.

Mr Lee and Ms Shi and their companies have accumulated more than $47 million of rural and bushland property in the Port Stephens area covering more than 5000 hectares since 2006, including a pine plantation that is currently subject to investigation by the NSW Environment Protection Authority.

The pine plantation came under scrutiny by a handful of state government departments after an unauthorised canal of up to 16 kilometres was discovered last December. This week the EPA confirmed the investigation continues and it has directed the property’s owner to stop the discharge of polluted water from the pine plantation into Monkey Jacket Creek, near Tea Gardens.