A battle for the ownership of the luxury Fota Island Resort in Co Cork has commenced at the High Court.
A Chinese businessman who claims he invested €30 million in Irish properties, including the five-star hotel and spa in Co Cork, has launched legal action in which he claims an alleged conspiracy to defraud.
Yuzhu Kang’s counsel, Declan McGrath SC instructed by Taylor Wessing Solicitors, told the court the central matter in controversy in the complex case is who funded the purchase of several properties including the Cork resort, the Kingsley Hotel in Cork city centre, and other properties.
The case before Mr Justice Max Barrett is set to last 12 weeks.
Yuzhu Kang, from Hebei Province in China and now living in Dublin, has sued businesswoman Xiu Xiang Kelly, who is also from the Hebei region but who lives at Fota Island Resort, Cork, and her son, Tuo Du, of the same address.
Mr Kang has also sued three companies: Xiu Lan Holdings Ltd and Lan Sideriver Investment Holdings Ltd, both with offices at Ballincollig, Co Cork, and Allied Express International Development Ltd, with registered offices in Hong Kong.
Purchase
In the proceedings, Mr Kang claims he agreed in 2013 to purchase Fota Island Resort, which was being sold on the instructions of the National Assests Management Agency (Nama).
He says, with the assistance of Ms Kelly, the company Xiu Lan Holdings, of which Mr Kang was the 100 per cent shareholder, was incorporated to hold the investment.
In the three years which followed, Mr Kang claims he made several further property acquisitions in Ireland, including the Kingsley Hotel in Cork City. The majority of the properties were acquired and are held by subsidiaries direct or indirect of the Holdings company, the court heard.
At issue in the case is the alleged transfer of shares in the years that followed, and Mr Kang has claimed it formed part of an alleged conspiracy to defraud him.
All the claims are denied, and it is contended by the other side that Mr Kang is allegedly in financial difficulty and that freezing orders had allegedly been issued in China against some of his assets.
'Vexatious' allegations
It is further contended that Mr Kang allegedly “fled” China in 2019 to allegedly escape both the Chinese authorities and his alleged creditors.
Mr Kang has vehemently denied these allegations and labelled them as “gratuitous, scandalous, vexatious and irrelevant to the matters in dispute” and has contended the claims have been calculated to embarrass him.
He said he left China in 2019 and denies he fled or that his departure from China was due to any need to escape the Chinese authorities or any creditors.
He has said there is no legal impediment to him returning to China, but he has remained in Ireland with a view to pursuing the proceedings. He also says he continues to own assets of significant value in China.
Ms Kelly has further contended that she effected the purchase of the Fota Island Resort in 2013 using monies belonging to her, and that she has at all times been the beneficial owner of the luxury resort.
It is claimed that Ms Kelly was anxious not to be identified with the proposed purchase of Fota Island Resort and that she used Mr Kang’s name “as a front” for her.
She claims that Mr Kang was aware, and consented to his then commercial profile being adopted in the context of the Fota purchase, and she was the preferred bidder.
She has claimed that the purchase money paid in respect of Fota was funded by herself and her son and third parties, but not Mr Kang.
The case continues.
