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Co Cork Resorts’: Assets Frozen Amid €1.8 Million Fraud Allegations

By March 19, 2024 No Comments
Fraud Allegations

In a striking development involving fraud allegations in two prominent resorts in Co Cork, temporary measures have been taken against two former directors amid accusations of a substantial financial deceit amounting to over €1.8 million. The resorts in question are Fota Island and Kingsley, properties entangled in a previously resolved legal tangle involving the Chinese entrepreneur Yuzhu Kang.

Recently, a trio of companies under Kang’s ownership – Xiu Lan Hotels Limited, Xiu Lan Riverside Hotel Limited, and Xiu Lan Payroll and Management Services – successfully secured interim injunctions against Xiu Xiang Kelly and her son Tuo Du. These individuals, previously serving as directors for the plaintiff companies overseeing the resorts, are now facing serious fraud allegations .

The court has specifically instructed Ms. Kelly to maintain her assets above €1.85 million, while Mr. Du is similarly bound not to diminish his assets below €1.7 million. Kang, in a detailed affidavit, accuses the duo of engaging in fraudulent activities, expressing concern over potential loss of the disputed funds.

The crux of the accusation lies in the alleged misappropriation of funds by the defendants during their directorial tenure. Kang asserts that nearly €1.5 million was inappropriately funneled to Kelly for art pieces and furniture significantly overvalued and not belonging to her. This expenditure, spanning from September to December 2023, supposedly for over 20 ‘antique’ items showcased within the hotels, is claimed to be unjustifiable.

Additionally, Kang brings to light a questionable payment of €246,000 in 2021 to the defendants under the guise of ‘sham redundancies’. Further complicating matters is a director’s loan of €125,000 to Ms. Kelly from Xiu Lan Hotels Ltd, which remains unsettled.

In light of these fraud allegations, Kang’s enterprises have moved to secure the defendants’ assets via court orders, aiming to safeguard against further financial leakage pending a full legal examination.

This legal motion follows on the heels of a recently concluded dispute wherein Kang alleged conspiracy against him by Kelly and Du, amidst claims of him investing around €30 million in various commercial properties. Despite the denial of these allegations, a settlement was reached outside court, affirming Kang as the sole proprietor of the contested assets, dismissing Kelly’s counterclaims, and concluding with Kang agreeing to a €2.5 million payment to the defendants – a minor slice of the properties’ estimated €70 million value.

Highlighting the urgency and gravity of the situation, Stephen Walsh BL, representing Kang, pointed out the discovery of the alleged misdeeds only after the previous legal settlement. This fresh plea for asset freezing is portrayed not as an enforcement of the previous settlement but as an effort to recoup company funds wrongfully taken, underscoring a severe breach of trust and potential financial dissipation risk.

The case, marked by accusations of deceit and financial manipulation, awaits further proceedings, with Justice Rory Mulcahy scheduling a follow-up in court.

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