The High Court has appointed a provisional liquidator to a company behind the Nuremore Hotel & Country Club in Carrickmacross, Co Monaghan, which it heard has “effectively been abandoned”.
It closed its doors last December 31st and its staff were laid off in early January. Its electricity and gas supply has been cut off, windows have been broken and it appears it is uninsured, the court also heard.
The Revenue Sheriff has executed a warrant on the property and has removed certain equipment required for its operation.
Revenue says its operating company, Nuremore Hotel Management Ltd, owes some €680,000 in tax arrears.
Last Monday, other creditors of the hotel brought a High Court petition seeking the operating company’s winding up. That application was adjourned to next month to give that firm time to file replying affidavits.
On Thursday, a one-side-only represented application to appoint a provisional liquidator pending winding up was brought against the Huawen Foundation Ltd, which, the court heard, appears to be the parent of a subsidiary that owns the hotel.
The petition was presented on behalf of Yan Wang, a Chinese citizen who, along with her husband, loaned €1 million to Huawen so that they could avail of Ireland’s Immigration Investor Programme.
This programme, which was terminated by the Government last month because of alleged abuses, allowed foreign citizens to be eligible for a visa to reside in Ireland on the basis of a minimum €1 million investment in Ireland.
The man behind Huawen, and also a director of Nuremore Hotel Management, was Chinese businessman Kai Dai, Ms Wang said in an affidavit grounding the petition to appoint a provisional liquidator.
Ms Wang, who lives in Sallynoggin, Dublin, said she and her husband contacted Mr Dai, who guided them through the investor programme process and recommended doing so by issuing a €1 million loan note to his Huawen company.
The loan note was due for repayment in July 2020 but, despite numerous requests for repayment, it has not been paid, she said.
Since then, there have been a number of judgments against Huawen, including two brought by former employees who were awarded sums by the Workplace Relations Commission, Ms Wang said.
[ Revenue ‘very concerned’ about Co Monaghan hotel with unpaid taxesOpens in new window ]
She also believes the Kylin Prime Group AG, a company associated with Mr Dai – and Mr Dai himself – were both sanctioned by the Slovenian Central Bank for unlawfully acquiring a controlling stake in a savings bank through nominees or intermediaries without authorisation.
Ms Wang said she was told by Mr Dai she would have to borrow from his Kylin group in order to subscribe to the €1 million loan note arrangement. Even though she had sufficient funds of her own, she said she succumbed to his pressure and borrowed €300,000 from Kylin.
She believes the reason Mr Dai was so insistent on this was that once investors became aware that this borrowing breached the terms of the Immigrant Investor Programme, they would be reluctant to seek assistance from the State if the money was not repaid. This was for fear their visas would be withdrawn.
She said Huawen has not filed company returns for three years and there is a risk that the assets of the firm will be dissipated unless a liquidator is appointed.
The hotel appears to be the only major asset of Huawen or the shares in the company that holds the assets. She fears it may be transferred to a third party to avoid legitimate claims of creditors.
This is amplified by the “(at best) questionable conduct and persistent failures to comply with companies legislation on the part of Mr Kai Dai”, she said.
Mr Justice Brian O’Moore granted the application by Brian Conroy BL for Ms Wang to appoint Declan DeLacy as provisional liquidator.
He was satisfied there was a concern about the way the company is managed and that its main driver, Mr Dai, has engaged in questionable conduct.
On the basis of the account presented to the court, it was difficult to see any meaningful dispute about the liability of the company.
The circumstances strongly favoured the appointment of the provisional liquidator as well as evidence that the hotel is “shuttered and subject to sporadic acts of vandalism”. There was also an issue about insurance and the need to secure it so that creditors can recover what they are owed if the hotel is sold.
He said the company could seek to discharge or vary his order with 48 hours’ notice. The case comes back in mid-April.
