An investigation carried out for the investors concluded a price “significantly less” than the €30m raised was paid to the seller of the shares of the company which owned the block and that “a material secret profit” was made by an Irish-registered company, Vantium Ltd, it was claimed by one of the investors in an affidavit.
Financial Plaza Shanghai Ltd (FPS), registered in the British Virgin Islands, has taken proceedings against Vantium Ltd and Mark Carroll, described as the principal, director and, together with his wife Patricia Kerrigan, a 99.7% shareholder of Vantium through a Luxembourg company.
It is alleged the defendants promoted an investment in Shanghai involving purchase of 100% of the share capital of a Hong Kong company, China Land Property Holdings Ltd (CLPH), first registered in 1992, with its only asset a 126-apartment building — Building C29, Xiang Cheng Road, Pudong, Shanghai.
Yesterday, Mr Justice Paul Gilligan granted Gary Compton, for FPS, an order directing the defendants to produce a number of documents, including documents related to the accounts of CLPH, to FPS.
The judge said he believed it was appropriate to grant the order having regard to the very serious nature of the allegations made.
The order was sought on an ex parte basis and the matter was returned to next month.
In an affidavit for FPS, Brendan Smyth, Fleet St, Dublin, said that arising from concerns of the investors, Mr Carroll was removed as a director of FPS in June last year but, despite requests from investors, had refused to provide them with the 2007 share purchase agreement and other documents, he said.
Mr Smyth said the investors wished to sell the CLPH company as soon as possible in circumstances including having been advised the property market in China “is recently showing signs of collapse” but could not do so unless Financial Plaza Shanghai could regularise CLPH’s accounts.
CLPH’s accounts for 2008 do not have an opening balance despite the fact the company has been in existence since 1992, he said.
The investors’ new auditors in Hong Kong also needed documents showing where the rent from the CLPH property was lodged, documents detailing dividends paid and the amount of share capital invested in CLPH.