Legal Battle for Ownership of Luxury Fota Island Resort in Co Cork

Fota Island Resort

14 February 2024

A battle for the ownership of the luxury Fota Island Resort in Co Cork has begun before the High Court.

A Chinese businessman who claims he invested €30 million in Irish properties, including the Fota Island five-star hotel and spa in Co Cork, launched the legal action claiming there was a conspiracy to defraud.

Yuzhu Kang’s senior counsel, Declan McGrath, instructed by Taylor Wessing Solicitors, told the court the central matter in controversy in the case concerns who funded the purchase of several properties including the Cork resort and the Kingsley Hotel in Cork city.

The case before Mr Justice Max Barrett is set to last 12 weeks.

Mr 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.

In the proceedings Mr Kang has claimed he agreed in 2013 to purchase Fota Island Resort which was being sold on the instructions of Nama. He says that, with the assistance of Ms Kelly, Xiu Lan Holdings was incorporated to hold the investment, with Mr Kang as the sole shareholder.

In the three years that followed, he says, he made several further property acquisitions in Ireland, including the Kingsley Hotel. He says the majority of the properties were acquired and are held by subsidiaries direct or indirect of the holdings company.

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 a conspiracy to defraud him.

All of the claims are denied, and it is contended by the other side that Mr Kang is in financial difficulty and that freezing orders were issued in China against some of his assets. It is further contended that Mr Kang “fled ” China in 2019 to escape 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”. He 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 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 to pursue 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 money 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 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 her, her son and third parties, but not Mr Kang.

The case continues.

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