Liquidators of collapsed Auckland-based construction company Mainzeal are pursuing Shanghai businessman Richard Yan, holding him liable for more than US$60 million owed to the company’s creditors, in a case that has implications for Chinese businesses operating in New Zealand.
Andrew McKay, a partner with business advisory firm BDO Auckland, who is responsible for winding up the construction company, told the Post on Monday that advertisements would be placed in newspapers in Hong Kong and mainland China this week, after liquidators were authorised to serve notice on the Chinese businessman.
“We have tried to contact Richard Yan through multiple channels, to serve notice on him and eventually obtained orders from the [New Zealand] High Court to conduct that service through email,” he said. “We have also been given instructions to place advertisements in leading newspapers in Hong Kong and China.”
The liquidators were authorised by the court to place the advertisement. In Hong Kong, the advertisement will be placed in the Post.
“Yan is not a well-known business tycoon in China, but the debt he owes to creditors could taint Chinese businesspeople’s reputation in New Zealand,” said Ding Haifeng, a consultant at local financial advisory firm Integrity. “Some Chinese entrepreneurs are still investing in New Zealand in agriculture and tourism businesses.”
Privately-owned mainland property developers, including Shundi Customs, part of Shanghai-based Shundi Group, and Beijing-based developer Fu Wah, have also been selling flats to buyers in New Zealand.
Shundi is still on ground with residential projects in Auckland and Queenstown and is constructing New Zealand’s tallest residential tower, Seascape, due for completion this year. Fu Wah was founded by Chan Laiwa, one of China’s richest women.
McKay said that the liquidators did not believe that Yan, also known as Yan Ciliang, lives at the Shanghai address known to them.
According to the notice to be issued to Yan and seen by the Post, he is required to pay creditors US$60.9 million within 30 working days.
On August 23, 2023, the Supreme Court in New Zealand had named the directors of Mainzeal which included former chairman and CEO Yan, Peter Gomm, Clive Tilby and former New Zealand Prime Minister Dame Jenny Shipley, as guilty of violating the country’s corporate laws, which prohibits insolvent terms from trading.
Yan was ordered to pay US$39.8m in damages, plus interest at the rate of US$5,452 per day.
“Any person knowing Richard Yan is asked to bring this notice to his attention,” the liquidators said in the notice seen by the Post and which is to be published shortly.
Mainzeal was one of the biggest construction companies in New Zealand before it collapsed in 2013, ending up owing creditors US$110 million.
The receivers paid the secured creditor, Bank of New Zealand, and preferential creditors in full. However, unsecured creditors are still owed US$110m.