A New York state court has handed down a $134m decision in favour of Pacific Alliance Group (PAG) in a case involving a politically notorious yacht.
Weijian Shan-led PAG, with $45bn under management according to its website, is known in shipping for a shareholding in Hafnia Tankers, investments in the former dry bulk portfolio of Norddeutsche Landesbank and its majority stake in Nordic Shipholding, the Danish tanker owner that is now being wound down.
But its highest profile maritime claim may be the 390-gt Lady May (built 2014). The yacht was built by Dutch yard Feadship at a reported price of £28m ($38m), but it gained fame when Donald Trump advisor Steve Bannon was arrested on it in 2020.
New York state Supreme Court Judge Barry Ostrager believes fugitive Chinese businessman Guo Wengui is the vessel’s beneficial owner, and ruled yesterday that within five days Guo must pay $134m in penalties for sailing the vessel out of New York waters in an attempt to hide assets from PAG.
Guo, also known as Miles Kwok, fled China in 2014 with police in hot pursuit, and has applied for political asylum in the US, so far unsuccessfully.
Pacific Alliance Asia Opportunity Fund, an affiliate of PAG, has been chasing Guo for five years over allegedly unpaid financings of real estate that Guo left behind in China. In February 2020, it won a New York judgment of $116.4m against him that remains unpaid.
“[The PAG entity] encountered difficulty identifying assets over which [Guo] exercised control because Kwok, who is a self-declared multi-billionaire, had secreted his assets in a maze of corporate entities and with family members. This scheme has enabled [Guo] to assert that he has no assets despite his lavish lifestyle,” wrote Ostrager in yesterday’s contempt order.
The Lady May was sailed to Florida and then to the Bahamas, in defiance of court orders to keep it in the jurisdiction. Since 31 May 2021, Guo has faced the prospect of a daily penalty of $500,000 for every day the yacht remains out of reach.
The title to the yacht has been successively filed with a Hong Kong corporation, a family friend and last of all the yacht’s namesake, Guo’s daughter Guo Mei, who purchased the Lady May in 2017 for one dollar.
The judge rejected claims that Guo did not own the vessel.
“The machinations associated with the shell game Kwok has orchestrated with respect to the Lady May are of a piece with every other evasive and contemptuous act [Guo] has taken during the five years this litigation has been pending, which is why there are 1,180 docket entries in this case,” wrote the judge.
Guo has been a visible fugitive. From a New York penthouse base, he first made headlines by purported revelations of Chinese corruption, not least involving former shipowner and shipbuilder the HNA Group.
Later he gained attention as a backer of right-wing causes including Twitter-like social media platform Gettr.
It was during an August 2020 visit on board the Lady May in Connecticut that Bannon was arrested on mail fraud charges, while his host Guo was present. Former president Trump later pardoned Bannon before leaving office in 2021.
