Hot Water Brigade


Rose McHugh

Rose McHugh

JUST ONE month after a settlement was reached in the high-stakes legal poker game between China-based businessman Yuzhu Kang and his former associate, Fota Island-based Xiu Xianj Kelly, over ownership of the valuable Fota Island hotel and golf resort, the parties are back in the ring. The high-profile directors who exited the business when the brown stuff hit the fan must be glad to be out of the picture.

The original case kicked off in May 2020 when Kang sued Kelly (aka Julie Kelly), her son, Tuo Du of the same address, and three companies, including Xiu Lan Holdings (XLH), the holding company.

Kang’s case was that there had been a conspiracy to defraud him and he was asking the court to decide who were the legal owners of the companies that purchased Fota resort for €60m on the instructions of Nama in 2013, as well as other assets such as the Kingsley Hotel in Sunday’s Well, which cost €6m.

As part of the settlement arrived at almost three days into the hearing last month, Kang has been declared 100% owner of XLH and both Kelly and Du have already stepped down as directors, with Kang joined by Carrigtwohill-based Haili Yang. As a result, Kang (who hails from Hebei province in China) is now the owner of Fota Island Resort and the other properties in the portfolio.

After Kang lodged his 2020 proceedings, Kelly maintained that she was the person who in fact owned the Fota resort and that Kang’s name had only been used as a “front” to keep her identity as owner secret. These claims have since been dropped.

Although the settlement avoided an estimated 12-week-long hearing in court, the legal eagles involved will still have had plenty to celebrate given the multiple motions and submissions involved since 2020, no less than 30 orders and a couple of judgments.

The meter, however, is ticking once again thanks to the filing of another set of proceedings last week, seeking freezing orders against both Kelly and Du, who are being sued by three companies – Xiu Lan Hotels Ltd, Xiu Lan Riverside Hotel Ltd and Xiu Lan Payroll and Management Services Ltd – from which the two defendants resigned last month.

The three entities are all owned by Kang through his Seychelles-registered Empower Growth Ltd, with Xiu Lan Hotels being the vehicle that operates as Fota Island Resort and Xiu Lan Riverside Hotel trading as the Kingsley Hotel.

In the proceedings to freeze assets, Kang is claiming that Kelly and Du defrauded the hotel companies of €1.85m, the bulk of which, he alleges, is accounted for by artworks and furniture transferred to the hotels by the defendants last year at grossly exaggerated values. The claims have been denied.

The two Kang hotel companies had featured some familiar names among the directors, at least up until around the time the litigation kicked off. For example, from February 2015 to August 2020 Rose McHugh was in situ on both boards. She is currently a director of Bank of America Europe, Irish Life and Imro, and is chair of the Crawford Gallery having previously served on the board of the listed Origin Enterprises plc. State gigs included Bord na Móna and chair of Bord Iascaigh Mhara.

Jerry Carey, squire of the impressive Hyde Park House in Montenotte and who is probably best known in political circles for his long stint as a trustee of Fine Gael, was also a director of Xiu Lan Hotels and Xiu Lan Riverside Hotel from 2015, remaining on board until May 2021. Carey made his moolah courtesy of the €21m sale of his Irish Business Software operation to the giant Xerox in 2010.

He invested a chunk of this in property and is a significant landlord through Trrumi Ltd, which rents out apartments in Mahon and Cork city centre. A minority stake here is held by Jerry’s wife, Patricia, and one property added to the portfolio last summer is the couple’s Hyde Park House abode. This had been put on the market in 2021 with a €2.2m price tag but, surprisingly, land registry records show that it was acquired by Trrumi in July 2023 for €1.9m.

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