This mansion is among three homes the fugitive is alleged to have purchased in the Vancouver suburbs
China CITIC Bank Corp, the banking arm of one of the mainland’s largest state-owned investment conglomerates, has filed a lawsuit in Canada to seize real estate assets in Vancouver worth C$7.3 million (US$5.58 million) from a businessman accused of fleeing China after defaulting on a RMB 50 million ($7.5 million) loan.
According to the suit filed in the Supreme Court of British Columbia in Vancouver last Friday, the bank claims defendant Shibiao Yan drew the line of credit on behalf Shijiazhuang-based Tanyuan Wood Company in June 2014. Just one month earlier, Yan — who was Tanyuan’s largest shareholder at the time — had incorporated a company known as TYMY Investments in British Columbia but allegedly did not disclose any interests or residences outside China on his application.
The 56-year old personally guaranteed the one-year loan but purportedly left the country with his family after withdrawing the full RMB 50 million amount. During the next three months, Yan and his wife purchased three homes in metro Vancouver worth an aggregate C$7.3 million according to documents filed by CITIC.
Countries Cracking Down on Fugitive Chinese Home-Buyers
The case comes at a time when the Canada, the U.S. and Australia are placing closer scrutiny on overseas buyers purchasing residences, beefing up efforts to identify money laundering via home ownership. In Vancouver, local residents have questioned the legitimacy of foreign funds in the city’s real estate market and urged authorities to take action.
Resentment among Vancouverites over foreign money flowing into local housing has grown as many have found themselves priced out of a market where average home prices rose 30 percent in the year to May.
A judge issued a temporary injunction against Yan last week, freezing his assets while China CITIC Bank attempts to make good on an arbitration ruling in March ordering Yan to pay the entire amount of the loan plus RMB 2 million ($301,000) in interest.
Vancouver lawyer Christine Duhaime representing the mainland bank described the case as having “global significance for China,” because although Chinese banks have claimed similar experiences of citizens avoiding loan repayment and moving abroad, this is the first time one has used civil law to freeze assets in order to recover their money.
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