Chinese billionaire Huang Xiangmo "dramatically" increased transfers of money offshore after he found out he was being audited by the Tax Office, according to a Federal Court judgement.

Key points: The ATO is chasing Chinese billionaire Huang Xiangmo for $141 million

The ATO is chasing Chinese billionaire Huang Xiangmo for $141 million Mr Huang left Australia for China last December but the Federal Court froze his assets on Monday

Mr Huang left Australia for China last December but the Federal Court froze his assets on Monday Court documents released Wednesday show that he has transferred $47 million out since an ATO review in 2016

The court granted an urgent interim order freezing Mr Huang's assets in Australia on Monday, following an application by the Deputy Commissioner of Taxation claiming that he had "grossly" understated his income in order to avoid paying tax.

On Wednesday the judge published her reasons for granting that order.

The ATO is pursuing Mr Huang for $141 million in tax, that they say he owes after "grossly understating" his income in the 2013 to 2015 financial years.

In her reasons, Justice Anna Katzmann said Mr Huang left Australia for China on December 4 last year, while an audit of his taxes was ongoing. His visa was cancelled the next day and he withdrew an application for Australian citizenship two weeks later.

According to the judgement, Mrs Huang left Australia only a week ago on September 11, presumably to join her husband in Hong Kong where they are believed to currently live.

The same day, the ATO issued a penalty notice for $141 million, but it was posted the next day. The payment is due on October 7.

'Money transferred offshore increased dramatically'

In January 2016, a risk review was launched by the tax office into Mr Huang's affairs, which was escalated to an audit in October 2017.

Huang Xiangmo (second right), pictured here with Ernest Wong, Julia Gillard and Sam Dastyari in 2013, was a prominent political donor. ( Supplied: Yuhu website )

Justice Katzmann said AUSTRAC records show that Mr Huang has been transferring tens of millions of dollars in and out of the country since January 2016 and overall far more money has gone out than come back in.

She continued that Mr Huang has transferred $47 million more out of Australia than he sent back in since he left the country nine months ago — a sum that is nearly twice as much as the previous year.

Justice Katzmann said she found there was a danger that the debt to the ATO could go unpaid because of the possibility the assets could be removed or devalued.

"Although there is no direct evidence that he intended to divest himself of his Australian assets or diminish them in value, the results of the audit indicate an intention to avoid paying tax by grossly understating income," Justice Katzmann wrote.

"Mr Huang is a Chinese national, currently overseas without an Australian visa who, since November 2018, has taken a number of steps towards severing his ties to Australia.

"Mr Huang has already taken steps to divest himself of his interest in Australian companies and trusts.

"Although he transferred money overseas before he was aware that he was under investigation by the ATO, since the audit began the amount of money transferred offshore increased dramatically."

Justice Katzmann also stated that his Australian assets don't appear to be enough to cover the whole debt and that the ATO appeared to have a strong case.

Complex finances of billionaire

Justice Katzman said Mr Huang started resigning as director of his various Australian companies in March 2016 and by December 21, 2018, he had resigned from all of them bar one.

The freezing order issued this week says Mr Huang cannot remove from the country, dispose or devalue any assets up to the value of $140.9 million.

However, it does allow Mr Huang to spend $10,000 a week on living expenses and up to $50,000 on legal bills.

The freezing order lists four properties in his assets including a mansion with views of Sydney Harbour in the upmarket suburb of Mosman, which was purchased for $12.8 million in 2013 in his wife Jiefang Huang's name.

It also lists two Chatswood properties which are worth more than $6.5 million together and a multi-million-dollar flat in a high-rise tower in Hong Kong.

The judgement says that all these properties appear to be owned outright.

Mrs Huang also owns a Hong Kong property worth $96 million, which she purchased late last year.

Still looming large over political landscape

Mr Huang moved to Australia in 2011 and began making large-scale political donations.

His links with then-ALP senior figure Sam Dastyari forced the resignation of the politician after it emerged Mr Dastyari had allowed Mr Huang's Yuhu Group to pay a legal bill, among other allegations.

After being denied an Australian passport, an exiled Mr Huang asked for his donations to political parties — believed to be at least $2 million — to be returned to him.

The Independent Commission Against Corruption is currently investigating whether Mr Huang made an illegal $100,000 donation to the NSW Labor Party in 2015.

An ongoing ICAC hearing has heard that Mr Huang allegedly delivered the cash to Labor headquarters on Sussex St in an Aldi shopping bag.

The hearing is investigating whether Mr Huang's donation was disguised in the form of 20 cash donations of $5,000 raised at a Chinese Friends of Labor dinner.

Mr Huang has denied the allegations.

On Wednesday, the ICAC hearing was told that NSW Labor forfeited the donation to the Australian Electoral Commission.

The tax case will return to the Federal Court on Friday.