Prosecutors allege Di Sanh Duong, 67, made a $37,000 donation to the Royal Melbourne Hospital in 2020 as a way to interfere with former federal minister Alan Tudge on behalf of the Chinese Communist Party.
His defence argued the donation was merely a way for the Chinese Australian community to show they cared during the COVID-19 pandemic in light of anti-Chinese sentiment.
But Melbourne magistrate Susan Wakeling on Thursday found there was sufficient evidence for the case to go to trial in the County Court.
Duong formally pleaded not guilty to a charge of intentionally engaging in conduct with the intention of preparing for, or planning, foreign interference.
Duong was charged in November 2020 following a joint investigation between the Australian Federal Police and the Australian Security Intelligence Organisation.
The 67-year-old, who was the Liberal candidate for the seat of Richmond in the 1996 Victorian election, is the first person charged under Australia's foreign interference laws.
Duong resigned from the Liberal Party following the charges.
The 67-year-old's bail was extended to August 25 when he will appear at the County Court for a directions hearing.
As part of his bail conditions, Duong is not allowed to leave Australia or contact a consulate, embassy, foreign intelligence agency or an elected official.
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