At first players and members were bemused by the bizarre looking announcement from their national organisation: "Table Tennis Australia (TTA) is pleased to announce that the Australian Donkey Industry Association has signed on as a sponsor."

Key points: Ejiao is made from the boiled skins of donkeys and is used in Chinese traditional medicine

Ejiao is made from the boiled skins of donkeys and is used in Chinese traditional medicine TTA has been criticised for accepting money from a donkey product importer

TTA has been criticised for accepting money from a donkey product importer Animal rights groups say the ejiao industry is cruel and that the product does nothing

"A lot of players thought it was a joke when they first saw it — 'the Donkey Association', you know, it was strange," champion player Wade Townsend told the ABC.

Everyone knew the organisation was in serious financial trouble and that new sponsors were desperately needed, but this announcement came as a complete surprise.

As members and players started searching for what scant information was available online about the Australian Donkey Industry Association (ADIA) they became disquieted.

The ADIA is a lobby group run by traders of a controversial traditional Chinese medicine promoted as a cure for everything from cancer to fixing acne called ejiao and which is made from the boiled hides of donkeys.

Warning: This story contains graphic content that may disturb some readers

The ADIA is one of a number of organisations and Chinese companies pushing for the establishment of an ejiao industry in Australia to cater for the booming Chinese market worth more than $1.3 billion.

Opposing them is an increasing number of wildlife and veterinary groups who say the industry is not only cruel with animals often bludgeoned with hammers and then skinned alive, but unnecessary because ejiao — like rhino horn, tiger penis, and bear bile — doesn't actually do anything.

'TTA shouldn't be on one side of a debate like this'

TTA CEO Scott Houston (R) with Australian Donkey Industry Association managing director Hongpu Nie. ( Supplied: TTA )

Players like Townsend, who is also a vegetarian, were horrified at the prospect of being associated with the industry.

"When I found out they were promoting ejiao as a lobby group I was concerned — it's a contentious issue within Australia and TTA shouldn't be coming down on one side of a controversial debate like this," he said.

"From an animal welfare perspective, it doesn't seem to be a great product to be supporting."

Townsend has been involved with TTA for more than a decade, first representing Australia internationally at the age of 15, and like all players has signed over the rights to use his likeness and image in ads and promotions for TTA and those involving sponsors.

He said that under the terms of his contract he could be disqualified from TTA squads and have his membership cancelled for speaking to the ABC about the deal.

Players like Wade Townsend fear they will be used to support ejiao products. ( Supplied: Wade Townsend )

"I am a vegetarian so I don't want to be associated with this product — I've had my face put up with a baby formula sponsor's billboard before, for example, but I wouldn't want that with ejiao products," he said.

Many posted on the TTA Facebook page questioning the deal with the donkey group, which the ABC has been told could be worth anywhere between $15,000 and $50,000.

Do you know more about this story? Email burton-bradley.robert@abc.net.au

One player, Gayle D'Arcy, wrote: "Personally I find it very disappointing that TTA is entering into a sponsorship agreement with a company whose industry RSPCA Australia says poses significant animal welfare risks.

"There will surely be many players who will find this new partnership concerning."

Shortly after questioning the decision, players and members were warned by TTA in correspondence obtained by the ABC to stay quiet if approached by the media and asked to delete social media posts critical of the sponsorship deal.

Some said they have been threatened with expulsion.

TTA declined to comment on the sponsorship terms or messages sent to TTA players and members citing "confidentiality".

The near identical logos for the Australian Donkey Industry Association and New Aolin Australia. ( Supplied: New Aolin Australia and ADIA. )

Disconnected phones, unanswered questions

Company searches reveal the Australian Donkey Industry Association is a Victorian registered incorporated association which has no website or online presence nor is it listed in any business directories.

The managing director Hongpu Nie is also the director of a donkey products company called New Aolin Australia Pty Ltd whose logo looks identical to that of the ADIA.

A third entity of which Mr Nie is a director and part owner called New Aolin (Syd) Pty Ltd is registered with the Australian Securities and Investments Commission (ASIC) and has a suburban address in Sydney listed as its office.

The announcement of the sponsorship was a low key affair with a media release and an accompanying image which shows Mr Nie and TTA CEO Scott Houston standing in a dimly lit room, curtains drawn, and holding a document between them that has had a large white square photoshopped over the top to hide the contents.

In an accompanying media release Mr Nie said: "We're sure that partnering with TTA will provide us with great brand awareness and allows us to demonstrate our backing for TTA's new direction."

The ABC has tried speak with New Aolin Australia and Mr Nie repeatedly but has been unable to make contact.

Numbers listed for New Aolin Australia were either disconnected or answered by people saying the business was not based there.

Details held by ASIC list the office of the company's Melbourne accountant Hilda Jiang and Co as the company's registered address.

Calls to the number listed on the accounting firm's website revealed a disconnected number.

A list of questions sent to Hilda Jiang's email address had not been responded to by the time of publication.

The ABC asked TTA CEO Scott Houston if he could provide a contact for ADIA but was told Mr Hongpu had poor English and was not in the country at present and unavailable for comment.

TTA told the ABC in a statement that there were no concerns about ADIA as a sponsor.

"While some people may have a philosophical position regarding the meat and livestock industry and animal products more broadly there were no considerations that TTA identified that provided cause for concern," the statement said.

In a response to questions about what the ADIA was from players and members on the TTA Facebook page the administrator wrote: "ADIA promotes the development of Australian donkey products, for which there is a burgeoning industry and significant demand internationally.

"ADIA's sponsorship of TTA aims to generate exposure for their organisation and the industry as a whole through members and supporters of TTA."

'Errors', 'issues', and 'financial challenges'

Animal rights groups say humane processing in Australia is fuelling demand for an unnecessary product. ( Reuters: Yiannis Kourtoglou )

TTA has traditionally been financially supported by Federal Government sporting bodies like the Australian Institute of Sport, and the Australian Olympic Committee. Commercial sponsors tend to be table tennis suppliers.

To understand how TTA ended up doing a deal with the ADIA it might be key to go back to 2017 when a financial crisis engulfed the sporting organisation that left it hundreds of thousands of dollars in debt.

In 2016 large sums of money were spent without being disclosed in that year's annual report which then had to be updated in the 2017 report.

There was $196,000 of previously undisclosed expenditure revealed, the reason given was because of "errors", pushing the reported $42,232 profit in 2016 to a loss of $154,544.

As a result of urgent cost saving measures five staff were made redundant at the end of 2017. Several members of the then board resigned around this time including the chairman and the previous CEO.

The 2017 annual report refers to "governance issues" and "financial challenges" during this period.

The problems were largely blamed on "the 2017 Australian Open World Tour event [which] created significant financial pressure for a range of different reasons", TTA said at the time in a letter to players and members.

A key reason for the losses was the decision taken in 2014 to invest in the Seagulls table tennis facility at Tweed Heads on the NSW North Coast. The club was run by company Pelican Sport, an entity under the control of TTA Australia.

In the three years it was under TTA ownership the venture ran at a loss with money loaned to it by TTA to cover these losses until the board reshuffle and new CEO in 2017 saw the business wound up and closed.

"TTA has implemented a range of measures, under a new board and new administration, designed to ensure proper financial practice and accountability," TTA said in a statement to the ABC.

"TTA acknowledges these measures were required to remedy some poor practices in the past."

How cruel is China's donkey product industry?

According to HSIA some ejiao makers repeatedly hit the head of the donkey with a hammer. ( Supplied: Humane Society International )

According to a detailed report by the Humane Society International Australia (HSIA) released last year "obscene animal cruelty" is rife in China's donkey product industry.

HSIA said donkeys are often smashed over the head with a sledge hammer or axe, and can take up to several minutes to die, with some being skinned while still alive.

Graphic videos obtained by HSIA from a donkey hide producer in China shows how animals are killed at what it says is a typical small donkey meat operation who then sell the skins to ejiao factories.

The claims made by HSIA have been supported by other groups such as the RSPCA and PETA who have released similar videos in recent years.

Sorry, this video has expired WARNING: GRAPHIC CONTENT: Donkey slaughter at Chinese hide and meat farm

Humane Society International's program manager for Animal Welfare Georgie Dolphin said it was impossible for importers and consumers to be certain whether or not donkey products had come from an operation involved in cruel practices.

"The whole ejiao industry is rife with animal cruelty, but there is no clear picture on exactly who is doing what from a consumer perspective," she told the ABC.

She said that even if animals were farmed and processed in Australia there were still other concerns about a local industry.

Donkey farming is currently being trialled by the NT Government at the Kidman Springs Research Station. ( ABC Rural: Dan Fitzgerald )

"Donkeys are extremely susceptible to stress and stress-related diseases and are not suitable for a commercialised mass farming approach," she said.

"Nor does it deal with the problem of feral donkeys as a control measure and has been shown elsewhere to not be an effective method for controlling wild populations."

Table Tennis Australia said it did not condone animal cruelty.

"TTA believes regulations regarding the humane and ethical treatment of animals should be observed across all primary industries," TTA said in a statement.

In the last few years ejiao companies have been lobbying the Northern Territory and Federal governments in the hope of setting up a donkey export industry in the Northern Territory using the 5 million feral donkeys already roaming there.

A bill put forward in late 2018 by the Greens and Derryn Hinch's Justice Party proposing a ban on the live exports of horses and donkeys is currently before the Senate.

Greens Senator for NSW and Animal Welfare Spokesperson Dr Mehreen Faruqi said revelations last year during senate estimates that the Department of Agriculture had received multiple enquiries from Chinese investors and was pushing for an NT donkey product industry were alarming.

"I'm really concerned that the Department of Agriculture and Water Resources is actively looking into establishing the live export trade of donkeys," she said in a statement to the ABC.

"We need to stop this trade in misery before it starts."

Vets and animal groups say donkeys live in small herds and are unsuitable for mass farming. ( ABC open contributor Kate B )

A spokeswoman for the Northern Territory Government said it had received 50 separate inquiries about setting up a local donkey industry.

"It is worth noting there is a market for donkey meat, hide and a range of other products, but the processing of donkeys and the export of processed product would be managed through a range of NT and Australian Government regulations."

The spokeswoman said the Government no longer supported the live export of donkeys overseas, preferring local processing instead.

Federal Minister for Agriculture David Littleproud refused to say if the Government supported live exports but said he did support local processing.

"Abattoirs processing donkeys for export must comply with Australian animal welfare standards," he said in a statement to the ABC.

"State and territory governments also enforce animal welfare laws which cover all aspects of animal handling from transportation through to slaughter in Australia.

"This trade has the potential to allow Australia to manage its donkey population humanely — a species which is already culled to reduce its numbers — while also delivering jobs to local communities."

Is ejiao really a miracle cure or another snake oil?

There is no scientific evidence about ejiao's effectiveness as a treatment for any of the conditions producers claim it can cure; no peer reviewed journal studies into its uses appear to exist, and many claim it does absolutely nothing — even the Chinese government at one point allegedly tried to warn people it was not an effective product, and yet it has exploded in popularity.

Once just one of many unproven traditional Chinese medicines, ejiao cost about $US9 a piece in China as recently as a decade ago.

In Chinese traditional medicine ejiao is considered a remedy for many conditions. ( Supplied: Deadkid dk )

But over time the hype around ejiao has grown to the point where today it can cost between $US400 ($550) to $US500 ($690) for a piece of the dark red gel which is usually soaked or stewed before being consumed.

Demand for donkey hides to make ejiao is currently estimated at about 4 million donkey hides a year, with predictions based on current trends this will rise to 10 million a year — but China's donkey population has shrunk from about 10 million in the 1990s to just 5 million today, according to the HSIA report.

This booming demand has seen ejiao makers turn to other countries to source donkey hides with populations in some countries in Africa and Asia declining by as much as 50 per cent in recent years and led to a surge in cases of donkey theft.

Several countries in Africa and Asia have banned exports of donkeys and their hides to China to protect local populations.

Donkeys in Asia and Africa are being stolen at record levels as the ejiao trade pushes up their value. ( Reuters: Alexandre Meneghini )

Demand is surging among Chinese expat populations overseas, with Australia currently the eighth largest importer of ejiao products worth $4 million in 2017 according to the HSIA report.

Several animal welfare and veterinary groups warn the demand for donkey hides is outstripping population growth and putting the animals long term survival at risk for an industry they argue often uses cruel killing methods for a useless product.

The Australian Veterinary Association described a global threat to donkeys worldwide.

"[There is] a growing animal welfare and economic threat from traditional Chinese medicine … to the global donkey population," wrote the editor in chief of the AVA Journal in late 2017.

According to the Humane Society's Georgina Dolphin, Australia is playing a significant role in shaping demand elsewhere and threatening donkey populations.

"Alarmingly, our report reveals that Australia is the 8th biggest importer of ejiao which means we're playing a significant role," she said.

"With the growing number of developing countries banning donkey skin exports to China to protect their donkey populations and the livelihoods of their citizens, any trade from Australia will only serve to undermine their efforts."