Investors take case over China property deal
More than 100 investors in an apartment property in China have brought proceedings in the Commercial Court over an alleged “secret profit” of some €8 million made by the promoters of the investment.
It is claimed some €30 million, plus about €4.5 million in fees, was raised from about 110 Irish and British investors in 2006 and 2007 to purchase a block of 26 apartments in Shanghai, operating as an aparthotel.
The investors claim they later learned that about €22 million was paid to the seller and “a material secret profit” of some €8 million was made by Vantium Ltd.
About 100 investors, including doctors, dentists, accountants, serving and retired company directors, farmers and businesspeople, are seeking damages totalling some €18 million in their proceedings. The proceedings are against Vantium Ltd, with registered offices at Upper Pembroke Street, Dublin; and Mark Carroll, Picton Place, London, and his wife Patricia Kerrigan.
Kelly Smith, for the defendants, opposed the proceedings being fast-tracked in the Commercial Court. She said Mr Carroll had made a substantial response to the serious claims made and mediation was a more appropriate route.
The parent company of the current tenant of the Shanghai property had reiterated an offer to buy it for a sum equating to about €44 million which was beyond a price mandated by the investors in 2010. If the property was sold, that would yield a 20 per cent return for the investors, she added.
Eoin McCullough SC, for the investors, said previous attempts to mediate had proven unsuccessful as his clients had taken the view Mr Carroll was not being honest with them. His side was sceptical of any purchaser produced by the defendant, counsel added.
Mr Justice Peter Kelly agreed to Mr McCullough’s application to admit two sets of proceedings by the investors to the Commercial Court list but stressed that decision did not prevent any further mediation. He also approved a timetable for the exchange of legal documents and returned the matter to March next.
The judge directed one set of proceedings will go ahead, while the second action will await the outcome of the first. The case proceeding is by Financial Plaza Shanghai Ltd, registered in the British Virgin Islands, and 12 investors, against Vantium Ltd; Mr Carroll; and Ms Kerrigan.