East Star dispute hearing postponed

By Yang Jing Source:Global Times Published: 2014-2-19 23:28:01

Lan Shili, East Star president Photo: CFP



 

A complex of Hubei Dongsheng Real Estate in Wuhan, capital city of Central China's Hubei Province, is seen in this file photo. Photo: CFP


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Hubei High People's Court was expected to start a hearing Wednesday morning on the lawsuit filed by a tourism company, China East Star Group Co Ltd, about taking back its real estate company from an investment group, but the court postponed the hearing without explanation, media reports said Wednesday.

The lawsuit has attracted widespread attention from the public in China since it is regarded as a crucial step in the comeback of the president of East Star, Lan Shili, after being released from prison last year.

The retrial which should have been held Wednesday morning was required by the Supreme People's Court, but the judge told East Star Tuesday afternoon that the hearing would be delayed, East Star said on its official Sina Weibo account, noting they had no knowledge of the reason or when the hearing would start.

Lan held a press conference Wednesday in Wuhan, capital city of Central China's Hubei Province, but the conference had to move to another place after starting, his company said on its Weibo account.

He noted that the hotel refused to let them continue because the local public security agency had told them to do so.

The Hubei High People's Court and Wuhan Municipal Public Security Bureau could not be reached by press time.

East Star, founded in 1991 in Wuhan, was once a well-known private enterprise with tourism as its core business. Lan was listed as the richest person in Hubei in 2005 by Forbes' wealth ranking.

In 2008, due to a lack of funds, East Star signed a contract with Wuhan-based Rongzhong Capital Investment Group, borrowing 315 million yuan ($51.8 million) from Rongzhong and transferring all stocks of East Star's Dongsheng Real Estate Development Co as collateral.

Although the contract was named as an entrustment contract, East Star believed the nature of the contract was for a loan rather than transferring Dong­sheng, which is worth 1.6 billion yuan, to Rongzhong, news portal 163.com reported Wednesday.

However, Rongzhong only paid 85.5 million yuan to East Star, leading to the bankruptcy of its airline East Star Airlines, Chen Youxi, the lawyer of Lan Shili, was cited by the report as saying.

In 2009, Lan filed a lawsuit against Rongzhong, demanding that it return Dongsheng to him in return for him paying back Rongzhong the 85.5 million yuan it had loaned East Star, but lost the lawsuit in May 2012.

On August 27, 2013, the Supreme People's Court ordered Hubei High People's Court to hold a retrial of the lawsuit, according to media reports.

Lan also accused Yuan Shanla, the former deputy mayor of Wuhan, together with Xie Xiaoqing, the president of Rongzhong, of having cheated him by transferring the stocks of Dongshen to Rongzhong, and forging his signature on stock transfer documents, according to the official blog of East Star.

 Yuan met with media Tuesday, saying he is innocent and he believed the retrial would affirm the original judgment, according to 163.com.

Xie also showed a handwriting identification report to the media, denying signature forgery, according to media reports.

East Star questioned the report Wednesday on its blog by posting documents samples supposedly showing the forged signatures.

Lan was sentenced to four years in jail over tax evasion in April 2010, and released from prison in advance on August 7, 2013 due to illness.

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