Millennium & Copthorne Hotels New Zealand is alleging deceit, intimidation and the breaking of company seals by a partner in a business venture that has gone sour in China.The company, which owns hotels in New Zealand, said its interest in the Chinese
Millennium & Copthorne Hotels New Zealand is alleging deceit, intimidation and the breaking of company seals by a partner in a business venture that has gone sour in China.
The company, which owns hotels in New Zealand, said its interest in the Chinese venture amounted to about $NZ22.7 million.
The story spelt out in a statement to NZX today begins with a 34% interest First Sponsor Capital Ltd (FSCL), which owns a 75% of Idea Valley Investment Holdings Ltd (IVIHL).
Millennium & Copthorne said it had encountered difficulties in dealing with businessman Cheung Ping Kwong. A company controlled by Mr Cheung owns 20% of IVIHL.
Under a joint venture agreement, Mr Cheung had management rights over Idea Valley Group Ltd (IVGL), which is wholly owed by IVIHL.
Mr Cheung was ousted from IVGL but refused to comply.
Millennium & Copthorne alleges that, in March, Mr Cheung "through deceit" seized control of the company seals of IVGL group companies, sacked people appointed by FSCL, took control of IVGL's office and denied IVIHL access to the books.
In China, the affixing of the company seal, together with the legal representative's signature, represents the full authority of the company.
New seals were registered, and press notices about Mr Cheung's removal were posted in a Chinese newspaper.
Millennium & Copthorne said even though these steps were taken Mr Cheung moved to sell IVGL's 100% interest in Hainan Hotel Owning Company, which owns the West Coast Resort Hainan Hotel.
The sale was to a party which in August 2008 had commenced litigation in Chinese courts in connection with the Hainan Hotel.
IVIHL also alleges that Mr Cheung used unconventional business practices, including intimidation and forceful tactics, to seize the seals and documents of Hainan Hotel Owning Company.
Mr Chueng is also alleged to have sold IVGL's 80% interest in a company that owned a mixed use development project in Dongguan, China, to a close associate.
IVIHL was continuing to fight the moves and was preparing a report to be lodged with Chinese police.
The remaining operations of the IVIHL Group, principally in Sichuan and which constituted approximately 38% of FSCL Group's net assets, remain under the control of FSCL.
