The prime minister said he had “no forewarning” of Andrew Hastie's plan to name Chau Chak Wing.
Prime Minister Malcolm Turnbull said he didn't know one of his colleagues was to accuse a powerful Chinese-Australian political donor of involvement in a major bribery scandal and has downplayed its significance.
Liberal MP Andrew Hastie, who chairs Parliament’s cross-party intelligence committee, used parliamentary privilege on Tuesday to name billionaire Chau Chak Wing as the man allegedly behind a $200,000 (US) bribe paid to former UN president John Ashe.
Mr Turnbull on Wednesday revealed he had “no forewarning” the Liberal backbencher planned to make the comments.
“The first I learned of Mr Hastie's remarks was of course after he'd given them,” Mr Turnbull told reporters.
The prime minister said Mr Hastie had the right to make the allegations under privilege rules but said the claims were “nothing new”.
Mr Hastie also claimed Dr Chau, who has made expensive donations to Australian universities and both major political parties, had close links to the Chinese Community Party.
Mr Hastie said US intelligence officials had confirmed to him that the man codenamed “CC-3” in an FBI bribery prosecution was Dr Chau, who is an Australian citizen.
Allegations of bribery have also been raised by the legal team representing the ABC and the newspaper publisher Fairfax, which are defending a defamation case launched by Dr Chau.
SBS News has contacted Dr Chau's company, Kingold Group, for comment about the allegations.
The development comes as the Turnbull government attempts to heal recent tensions in the Australia-China relationship.
Foreign Minister Julie Bishop recently met with her Chinese counterpart Wang Yi on the sidelines of a G20 ministers meeting in Argentina. Ms Bishop said the meeting was “very warm”.
But a Chinese foreign ministry spokesperson said Mr Wang told Ms Bishop that Australia needed to “correct its understanding” of China and “take off tinted glasses”.
Mr Turnbull said the Chinese ministry was “entitled to make such statements” and described the relationship as “frank”.
The recent tension stems from the Turnbull government’s draft foreign interference laws, which are designed to restrict the impact of foreign lobbying on domestic politics.
Labor's shadow defence minister Richard Marles said the saga demonstrated an urgent need to pass the legislation.
"What I take from it, now that the information has been put out, is how important it is that we get our foreign interference laws in order," Mr Marles told Sky News.
"We've been calling, Labor's been calling, since June of last year for a ban on foreign donations in our elections. It's critically important that we achieve that."
Dr Chau’s name is well-known, particularly thanks to his decision to fund the Frank Gehry-designed business school at the University of Technology Sydney, which is named in his honour.
“[Dr Chau] has also been a very significant donor to both of our major political parties,” Mr Hastie said.
“He's given $4 million since 2004 [and] he's also donated $45 million to universities in Australia.”