Millenium and Copthorne released a statement yesterday saying it had encountered "certain difficulties" at its joint venture Idea Valley Investment Holdings.
It called on the Chinese authorities to step in after Cheung Ping Kwong, one of its partners, took control of the venture by "deceit." The company also accused him of using intimidation tactics to sell off a resort hotel on the west coast.
Cheung Ping Kwong was appointed chief executive of Idea Valley Group, which deals in the property markets in Guangdong and Hainan, following an agreement with the rest of the joint venture in 2007. Two years later, the board resolved to oust Mr. Cheung, saying he had failed to meet the conditions outlined in the venture agreement.
The board also resolved to transfer the company seals to the chief financial officer. Chinese law gives company control to the affixer of the company seals with the legal representative’s signature.
Despite the board’s resolution, Cheung Ping Kwong refused to comply, M&C’s statement said, and "through deceit seized unilateral control of the company seals." He took control of the company’s offices and denied the joint venture – Idea Valley Investment Holdings – access to accounts, records, bank statements and other information.
The Independent states M&C’s investment in the Chinese joint venture is valued at about $16.3m.