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