Irish investors challenge Chinese property ruling

One court’s findings of fraud was overturned by another, without taking any further evidence or depositions

The Shanghai skyline

Samantha McCaughren Twitter Email

May 02 2021 02:30 AM

Legal representatives for a group of Irish investors in a Shanghai property development, who claim their property was fraudulently transferred to a Chinese firm, are preparing to file a complaint with China’s high level Central Commission for Discipline Inspection

The 29 Irish investors spent €6.3m on the units in Golden Mansions, which was operated by a local firm as Crowne Plaza Hotel. The investors believe the units are now worth €18m.

The Irish group’s lawyers say they have serious concerns about the manner in which a decision of an intermediate court in their favour last year was set aside by a higher court in recent months.

Nine of the Irish investors have prepared statements as part of the complaint.

In 2005 around 300 investors bought units in a building known as Golden Mansions Shanghai. It was arranged by BCK Wealth Management in Dublin, which managed the investment for several years.

Investors who had mandated BCK to act on their behalf in the disposal of the property received proceeds from the sale in 2017. However, 29 investors were no longer represented by BCK at this time.

This group of investors learned in 2019 that their units had been transferred to a Shanghai company, Shanghai Haoyuan Industrial.

It is alleged there was a forged purchase agreement, which led to an arbitration finding in Shanghai Haoyuan’s favour.

The investors filed litigation with the Shanghai First Intermediate People’s Court, which recommended the contract and arbitration award be revoked.

This was to be endorsed by the Shanghai High Court – but the court recently decided to reject the application to revoke the arbitration.

A spokesman for the investors said: “Our lawyers are satisfied that very serious concerns arise about the manner in which the decision of the Intermediate Court, arrived at after taking painstaking evidence and examining documentation, were set aside by a higher court.

"Our complaint to the investigating authorities will refer to how the Intermediate Court made findings of fraud in the transactions.”

"The High Court, without taking any further evidence or depositions, overturned that decision and have been unwilling or unable to justify that ruling since,” he said.

The group’s representatives been previously in contact with the Irish Consul-General Wendy Dorman Smith, and requested that she highlight the concerns with the relevant authorities.

They also told her that the decision by the higher court not to endorse the ruling in their favour came as a “complete shock”.

The representatives have also made the Department of Foreign Affairs aware of the issues.

The Chinese Embassy did not respond in queries at the time of going to print.