Automotive News   |   Automotive News Europe   |   Autoweek   |   Automobilwoche

Automotive News China Newsletter
Register our free newsletter, sent each Monday and Thursday

     Automakers   Suppliers   Auto Show   Comment   Car Cutaway   Newsletters   Press Releases   Chinese Version   Register for Newsletter
  Contact Us:   Editorial   Advertising   Subscription Information   |   About Us   Media Kit
Home >> Automaker Email this story   Print this story
 
Ferrari supercar fight prompts embezzlement lawsuits in China
Bloomberg | 2017/5/9

Some of the rarest cars in the world are at the heart of a London lawsuit embroiling an associate of one of China's wealthiest men.
     
Zhao Hua Chen, who works for Chinese aluminum billionaire Zhongtian Liu, has accused Eric Po Chi Shen of buying real estate, rare red diamonds and supercars with money he embezzled while acting as his financial adviser, according to court documents filed in London's High Court.

At stake in the case is ownership of two classic cars that could be worth as much as $87 million (600 million yuan). Chen says his former business associate falsified his financial reports, lied about how much he spent on property deals, then used funds from those activities to buy a 1998 McLaren F1 and a 1963 Ferrari 250 GTO Berlinetta. 

Chen is asking a judge to order the cars to be sold or handed over to him.

The case was filed in September and is being heard in the United Kingdom because the cars are in storage outside London. 

In a separate lawsuit in Texas, Chen alleges that Shen bought red diamonds with embezzled funds, claiming he has the diamonds in his possession in Hong Kong.

"The cars involved in the suit are of extraordinary economic value but they are also of extraordinary interest in themselves," Robert Dougans, a lawyer for Chen at the Bryan Cave law firm, said in an interview. There are only four or five other similar Ferraris worldwide, co-counsel Charles Pok said.

Colorful past
The 1963 Ferrari 250 GTO Berlinetta is likely worth $25 million, according to John Collins, a classic Ferrari dealer at Talacrest. The model is a Series 2, he said in a telephone interview, with the Series 1 fetching at least $40 million. 

Both parties in the lawsuit say it is worth much more than that; Shen says it could fetch as much as $72 million.

The car has a colorful past. Previous owners included English TV and radio personality Chris Evans, a one-time host of the BBC's Top Gear program, and car collector Jean Pierre Slavic, according to the Berlinetta website.

Only 39 of the Italian brand's 250 GTOs were ever produced, one of which sold in 2013 for a record $52 million.

The McLaren, estimated to be worth as much as $15 million, also has seen its fair share of action. According to court filings, Shen took it to Italy in 2014 to participate in the McLaren Owners' Tour of Italy, before crashing it into a tree on the first morning of the event. 

Mr. Bean star Rowan Atkinson was one of the first to come to Shen's aid, according to press reports at the time.

Chen has chosen to make a claim to the cars rather than asking for money because of the significance of the vehicles themselves, Dougans said. The cash value of Ferraris has soared in recent years. The Hagerty Ferrari Index of 13 models has more than doubled since 2013, and a 1962 GTO 250 sold for $38 million in a 2014 auction, the most ever.

Death threats
If the case goes to court, Chen's lawyers will aim to prove that the cars were bought with money stolen from their client and the two sides will also debate whether a debt certificate signed by Shen was completed under duress.
  
Shen denies committing fraud and alleges that he only signed the debt certificate after he was repeatedly threatened by Zhongtian Liu, one of China's wealthiest men and the owner of aluminum firm Zhongwang Holdings. Liu is worth an estimated $2.54 billion, according to Bloomberg's Billionaires Index.

On one occasion, Liu allegedly told Shen that "someone might come up behind you with a needle and you might find yourself in a container," Shen's lawyers said. Shen says he believed Liu "could and would follow through on his threats" as he "believed that Mr. Liu had very substantial financial links to powerful figures" in China, the filing said.

Shen's lawyers declined to comment on the case beyond what is in the filing, saying it had not been possible to reach their client. A spokesperson in China for Zhongwang said Liu "vigorously denies such allegations and believes them to be fabricated by an individual in the midst of litigation."

Rarity value
The dramatic lawsuit seems unlikely to reach a speedy resolution. In a recent filing, Justice Marcus Smith said he had "grave concerns" about the pleading of the case and allowed Chen another chance to prove ownership of the cars.

Meanwhile, the elite vehicles are being stored at an old airport in Suffolk.
     
Chen's lawyer says his client intends to pursue his claim.

"It's not as if it was just property or stocks and shares held around London and New York and Singapore, it's tangible assets that are of real interest to people and real rarity value," Dougans said.

Related Stories
  • Exotics rebound as China's rich consumers snub Xi's austerity drive
  •     --Published:2017/21/4
     
  • Lamborghini scales back sales expectations
  •     --Published:2013/4/10
     
  • Ex-Ferrari designer aims to reshape BAIC
  •     --Published:2012/19/6
     
  • Ferrari apologizes after promotional joy ride spins out of control
  •     --Published:2012/15/5
     
  • Ferrari to add dealers in China
  •     --Published:2012/25/4
     
  • Ferrari IPO proposed for Hong Kong exchange
  •     --Published:2011/2/9
     
  • Fastest Ferrari road car to debut in Beijing
  •     --Published:2010/14/4
     
  • Ferrari sees China as top 5 mkt
  •     --Published:2009/4/11
     
     

    Our Newsletter Editions
    Automotive News China produces two email newsletters each week. You can sort your news by the articles highlighted in each of our newsletters here.

    Select your newsletter     

     

    Automotive News China
    Room 1303, Building 2, Lane 99, South Hongcao Road,
    Shanghai 200233
    Telephone: 86-139-1851-5816
    Fax: 86-21-6495-0895
     
    Home | Help Center | About Us | RSS
    Entire contents © Crain Communications, Inc.
    Use of editorial content without permission is strictly prohibited. All Rights Reserved.
    ICP06057291