Assets of two former Fota Island Resort and Kingsley Hotel directors frozen

The owners of two Co Cork hotels, including five-star Fota Island Resort hotel, have obtained temporary orders in the High Court freezing the assets of two former directors alleged to have defrauded the businesses of over €1.8m.

The ownership of the luxury Fota Island Resort and the Kingsley Hotel has already been the subject of a long-running legal battle by Chinese businessman Yuzhu Kang, which was only resolved last month.

On Friday, Xiu Lan Hotels Limited, Xiu Lan Riverside Hotel Limited, Xiu Lan Payroll and Management Services, which are firms owned by Mr Kang, obtained temporary freezing orders against Xiu Xiang Kelly and her son Tuo Du. It is claimed that the two are both former directors of the firms which own and operate the resorts.

Ms Kelly has now been ordered by the High Court not to reduce her assets below a value of €1.85m, while Mr Du cannot reduce his assets below a value of €1.7m.

Mr Justice Rory Mulcahy granted the temporary freezing orders on an ex-parte basis, and the case will come back before the court this week.

The judge said he was satisfied the applicant had made out a sufficiently strong case.

Mr Kang’s counsel, barrister Stephen Walsh, said the freezing orders application was not an attempt to enforce the settlement of the other proceedings, but is an attempt to recover monies belonging to the companies that have been allegedly unlawfully misappropriated.

In a sworn statement to the court, Mr Kang claims that Ms Kelly and Mr Du have allegedly engaged in dishonest and fraudulent behaviour.

He alleges that at a time when they were directors, they got the companies to pay Ms Kelly approximately €1.5m for various artworks and furniture.

Those monies were allegedly paid between September and December 2023, for over 20 “antiques” placed on display in the hotels.

The items were allegedly “not remotely worth” what was paid for them, Mr Kang claims.

Mr Kang also alleged that Ms Kelly was not the owner of any of the artworks in question.

Mr Kang also alleges that €246,000 was paid to the defendants in 2021 over what the court was told were “sham redundancies”.

The court further heard there were concerns about an alleged directors’ loan of €125,000 advanced to Ms Kelly by Xiu Lan Hotels Ltd which remains, it is alleged, unpaid.

As a result of these alleged activities, Mr Kang’s firms have sought the freezing orders.

Last month, proceedings over the ownership of Fota Island and other properties were settled in the High Court. As part of the settlement, various stock transfers were declared null, void, and ineffective, and Mr Kang was declared a 100% shareholder in the company Xiu Lan Holdings Ltd of Ballincollig, Cork, which is the 100% shareholder of Xiu Lan Riverside Hotel Ltd.

The settlement effectively meant that Mr Kang is the owner of the Fota Island Resort and the Kingsley Hotel in Cork City, as well as three other properties that were in dispute.

Yuzhu Kang had sued businesswoman Xiu Xiang Kelly, who is also from the Hebei region but who lived at Fota Island Resort, Cork, and her son Tuo Du, of the same address.

Mr Kang had also sued three companies — Xiu Lan Holdings Ltd and Lan Sideriver Investment Holdings Ltd — both with offices at Ballincollig, Cork, and Allied Express International Development Ltd, with registered offices in Hong Kong.

All of the claims made were denied and Ms Kelly, in a counterclaim which was dismissed, contended that she effected the purchase of the Fota Island Resort in 2013 using monies belonging to her.