The Real Deal Miami

Fashion Mall’s Sheraton deal could die amid “grave concerns”

Claims of malfeasance leveled against project manager by Chinese conglomerate

The Fashion Mall in Plantation

Fashion Mall project manager Wei Chen’s plans to acquire the site’s Sheraton-branded hotel are unraveling amid allegations he tried purchasing the building without Tangshan Ganglu Iron & Steel Co., a business partner involved with the deal.

The China-based conglomerate redeveloping the shuttered mall sued Chen for malfeasance and misappropriation of funds after he was named manager. The suit claims Chen misappropriated $48.7 million in capital that the company contributed to Mapuche LLC, the entity that controls the 600,000 square-foot redevelopment site.

According to the Daily Business Review, a report from Fort Lauderdale attorney Charles H. Lichtman cited “grave concerns” regarding the hotel deal. Lichtman, who serves as the court-appointed receiver, also asked the court for permission to investigate a series of transactions Chen made through funds he might have funneled through Mapuche.

Court records show that though Chen has invested none of his own capital into Mapuche, he used $2.6 million from the entity’s account as a deposit on the $16.93 million deal. Tangsgan Ganglu and its chairman Zhen Zeng Du claim they invested $160 million in Mapuche for the $300 million mall makeover.

Tangsgan Ganglu owns 80 percent of Mapuche, with Chen serving as a minority owner and manager since 2005. [Daily Business Review] -Kerry Barger