13 Aug 2019

Mainzeal chairman Richard Yan faces bankruptcy over failure to pay $18m damages

10:40 am on 13 August 2019

The liquidators of the failed construction company Mainzeal are threatening to bankrupt its chairman unless he pays $18 million in the next month.

18072016 Photo: Rebekah Parsons-King. Wellington High Court.

The High Court imposed $36 million penalties on the company's directors last year. Photo: RNZ / Rebekah Parsons-King

The company's liquidators, BDO, said they have made numerous attempts to contact Richard Yan, who now lives in China, to get him to pay his share of the $36m penalties the High Court imposed on the company's directors last year.

"After numerous attempts to get Richard Yan to pay the $18 million in damages he owes to Mainzeal and its creditors, liquidators have been forced to get the High Court to order him to pay the amount owing within 25 working days, or face bankruptcy," BDO's Andrew Bethell said.

The High Court earlier this year found Mr Yan and the other directors were negligent in allowing the company to continue trading while insolvent.

The directors have appealed the decision and the liquidators have filed a cross appeal.

"We have not received this money nor has Mr Yan acknowledged that he intends to pay. Therefore we have been left with no choice but to file bankruptcy proceedings against him to recover the money," Mr Bethell said.

An insurance company had provided security for the $18m owed by the other three directors - former Prime Minister Jenny Shipley, Peter Gomm and Clive Tilby.

If Mr Yan was made bankrupt any assets he has in New Zealand could be seized and sold. It's understood he still owns several properties in Auckland.

The appeals and cross-appeal are expected to be heard early next year.

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