Chinese bank claims fugitive bought luxury B.C. real estate

A major Chinese bank has obtained a court order in B.C. freezing the assets of a businessman accused of fleeing China and buying "luxury" Lower Mainland homes after defaultingon a $10 millionloan.

In anapplication brought before a B.C. Supreme Court judge last week, lawyers for China CITICBank claim Shibiao Yan and his wife bought more than $8 million worth ofpropertiesin Surrey and Vancouver over a three-month period beginning in June 2014.

'Global significance for China'

The court documents claimYan, who was president of the Tanyuan Wood Company in Shijiazhuang, China,withdrew RMB 50 million from a line of credit he obtained on behalf of his company.

The bank claims the 56-year-old provided a personal guarantee for the money.

The loan came due last summer. But the bank claims Yan and his family had already fled to the Vancouver area.

Yan could not be reached for comment. He was not represented at the ex parte hearing and none of the allegations against him have been proven in court.

The lawyer who represents the bank, Christine Duhaime, would not comment on the proceedings, but tweeted that the case was of "global significance for China".

The court casecomes amid ongoing speculation about the role of offshore moneyand cash from wealthy Chinese investors in particular, in driving the out-of-control Lower Mainland real estate market.

Last year, Canada's anti-money laundering watchdog FINTRACclaimed to have stepped up enforcement activities in Vancouver's real estate market. A report prepared for the agency suggested the real estate sector was at "significant risk" for money laundering.

At the time, a representative of acompany that works with foreign governments and banks to recover funds told CBC that he had been hired by a number of Chinesebanks to track down money in B.C.

Yan is not accused of any criminal wrongdoing.

Houses in Surrey, Vancouver

Last week, Justice Gregory Bowden issueda temporaryMareva injunction against Yan, freezing his assets as the bank tries to make good on an arbitration ruling it claims to have obtained in March, ordering Yan to pay RMB 50 million plus RMB 2 million interest.

That amount works out to a little more than $10 million Cdn.

According to the court documents, Yan incorporated a company in B.C. called TYMY Investments in March 2014, and his 36-year-oldwife paid $2.5 million for a house in Vancouver a month later.

The bank claims Yan applied for the loan in June 2014, but did not reveal that he had a residence or any interests outside of China. He was allegedly given a line of credit in June 2014 and withdrew the entire amount within days.

The documentsclaimYan bought three homes in Surrey in the next three months, one worth $1 million, one worth $3.1 million and one worth $2.3 million.

An affidavit sworn by thebank'svice-president says the loan became due in June 2015, but Yan could not be found; he is now believed to belivingin British Columbia with his wife and daughter.

As part of the court proceedings, the bank filed pictures of three homes in Surrey allegedly bought in Yan's name, and one bought in the name of his 36-year-old wife.

One of the affidavits says aLondon-based investigation firm provided the bank with documents it retrieved from "the periphery" of the Vancouver home including a destroyed MasterCard in Yan's name, several torn banking letters and an undated note in Mandarin with characters identical to those in the loan agreement.