A Chinese private equity firm is asking the B.C. Supreme Court to enforce a $33M ruling and seize a Vancouver, B.C., luxury home linked to alleged misappropriation of hospital funds
A private equity firm is attempting to seize a Vancouver luxury home from a couple who was allegedly involved in the misappropriation of millions of dollars meant for a hospital in China.
In a May 29 petition, Wuhu Yuanxiang Tianying Investment Management Centre called on the B.C. Supreme Court to enforce a 2024 decision from the China International Economic and Trade Arbitration Commission (CIETAC).
CIETAC’s intervened after Wuhu said it invested about $18 million to help build the Shenyang Meideyin Women and Children Hospital—a private for-profit hospital in northeastern China.
Two Chinese nationals—Yanwei Li and Junna Yang—are alleged to be founders and shareholders in the project. The petition claims Yang held a 20 per cent stake in the hospital with Li acting as the “controlling mind.”
The investment into the maternity hospital came only a year after China ended its one-child policy—a program introduced 35 years earlier to curb what the Chinese Communist Party saw as unsustainable population growth.
First replaced with a nationwide two-child policy, it was later expanded to three-children alongside other measures to encourage people to have larger families. The loosening of rules came as China’s population peaked at 1.4 billion people in 2021, and now faces the prospect of a prolonged contraction.
Amid the demographic changes, the equity firm says it planned to recoup its investment through an initial public offering. But when the hospital failed to meet its targets, the IPO fell apart, triggering a mandatory buyback clause that the husband-and-wife founders allegedly ignored.
According to Wuhu’s petition, CIETAC found Yang and Li are among a group who owed the equity firm its initial investment, plus returns, damages, legal costs and other fees.
After seizing some of the owed money in China, the equity firm says the outstanding balance remains at more than $33.7 million.
Business in Vancouver has been unable to verify CIETAC’s decision as its arbitrations are not usually made public.
After misappropriating the investment, Wuhu claims the couple funnelled a portion of the money to B.C., where they used it to pay off a mortgage, and in 2019, build a luxury home in Vancouver’s Arbutus neighbourhood.
The seven-bedroom, seven-bath home is surrounded by flowering cherry trees. It contains a media room, wet bar and wine cellar, and is currently listed for sale at $5.18 million.
Wuhu is calling on the B.C. court to fully convert the Chinese trade commission’s decision into a local judgment so it can seize the proceeds of the Vancouver home before it is sold.
The defendants have yet to file a response.
A woman who identified herself as Junna Yang and is currently living at the address told BIV that she purchased the property back in 2014.
She denied that her husband is Yanwei Li. She also said she was unaware of the court case, the company or the hospital involved.
“I haven’t heard anything about it. I don’t know what you are talking about,” she said in Mandarin.
A lawyer for the private equity firm declined to comment beyond the allegations in the court filing.
None of the claims have been tested in court.
—With files from Daisy Xiong