Investment adviser Chunglin Yu was ordered to pay immigrants Yihua Zhang and Wei Hu $1.22 million damages being misappropriated funds of $500,000 intended to support their entrepreneur work visa application, costs of retraining for employment in New Zealand, plus interest paid on loans needed to tide them over before getting new jobs. Media reports have Ms Yu under investigation in China as a ‘major suspect’ in financial crimes.
Ms Yu was held liable in the tort of deceit. Justice van Bohemen found she had lied about the status of her investment business in New Zealand (it was not registered with the Financial Markets Authority) and she had lied about the destination of their $500,000 investment (funds promised to be invested in bank deposits and other securities were stolen).
The High Court was told Ms Zhang and her husband Dr Hu used the services of Ms Yu and her businesses Finawin Finance Management Jiansu Ltd and Honest Deal Holding Co Ltd, as part of their planned emigration from China to New Zealand in 2015. They had met Ms Yu previously when on a preliminary trip to New Zealand investigating business opportunities assisting Chinese students to study here. They borrowed the equivalent of about $500,000 from a Chinese bank. This was passed on to Ms Yu to be remitted to New Zealand as part of their application for an entrepreneur work visa. Ms Yu was to invest this money on their behalf pending approval to immigrate. Ms Yu was to receive thirty per cent of any profit as her service fee.
With their $500,000 stolen, Ms Zhang and Dr Hu no longer qualified for a work visa. Their visa was cancelled. They remained in New Zealand on student visas; Dr Hu enrolled for a MBA, Ms Zhang training as a kindergarten teacher.
The High Court was told of reports in Chinese business media of Ms Yu being arrested in China sometime in 2015 for financial crimes. She owns property on Annalong Road in the Auckland suburb of Dannemora. Rating valuation as at July 2015 was $1.525 million. There is a freezing order over the property. There is also an ANZ bank mortgage registered against the title.
Zhang v. Yu – High Court (27.08.18)
18.171