Caixin
Jun 13, 2017 08:02 PM
SOCIETY & CULTURE

Chinese Builders Take Guo Wengui to U.S. Court Over Alleged Unpaid Bills

(Beijing) — Nine Chinese onshore construction companies took the fugitive tycoon Guo Wengui to a U.S. court, seeking 272 million yuan ($40 million) over alleged unpaid bills, according to a court filing seen by Caixin.

The lawsuit was filed collectively by those nine companies in the New York state Supreme Court on Friday, the filing shows. Defendants include Guo and four units he controls.

This is the latest dispute brought forward by Guo’s business partners. Guo, 50, was listed by Hurun Wealth Report as the 74th-richest Chinese in 2014, with 15.5 billion yuan in personal assets. He is believed to be living in the U.S. after he fled China in 2014 to avoid graft investigations that brought down his close ally Ma Jian, the disgraced former vice minister of state security. Interpol has issued a “red notice” on Guo, China’s Ministry of Foreign Affairs has said.

In the 38-page filing, the nine companies said Guo and his companies allegedly failed to pay in full on two construction projects in Beijing — Morgan Plaza, also known as Pangu Seven Hotel Beijing, and Jin Quan Squares. These projects were built between 2007 and 2015, it added.

Guo also allegedly “conveyed, transferred, converted, relocated, and removed all of the assets” associated with those two projects to the U.S. to finance his “luxury life” there, the filing said.

Those companies had sued Guo over unpaid bills in Chinese court several times, which ruled against Guo. But they said they were not able to recoup the missing payments from Guo, claiming Guo has moved the related assets abroad, the filing added.

One of the creditor companies is Beijing Fu Le Hong Ma Jian Zhu Zhuang Shi Gong Cheng Ltd. The company’s chief manager, surnamed Zhou, told Caixin the company was involved in both projects mentioned in the lawsuit.

“The contracts of the two projects totaled nearly 20 million yuan,” Zhou said. “Based on our internal calculation, they still owe us more than 10 million yuan. Even based on their calculations, we are still owed 7 million yuan.” Zhou declined to elaborate further.

An executive from another plaintiff company who spoke only on condition of anonymity said: “We’ve been working for (Guo and his companies) for so many years now. The amount they owe us may not be significant to them, but to small company like ours, it really matters.”

Guo, his companies named in the lawsuit, and the seven other plaintiff companies couldn’t be reached for comment.

Contact reporter Dong Tongjian (tongjiandong@caixin.com)

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