Castel is currently facing two other (financial) investigations in France, this time over its operations in China, according to French regional newspaper Sud Ouest. The investigation into the alleged filing of “false balance sheets” and “money laundering fraud” by Castellane through its subsidiaries is relatively complex.
The investigation revolves around Castel’s transactions in China through its Castel Frères and BGI (Beers and Coolers International) branches, the latter through Singaporean businessman Kuan Tan (Chen Guang) establishing two joint ventures in the Chinese market (Langfang Changyu-Castel and Yantai). Changyu-Castel partnered with Chinese wine giant Changyu in the early 2000s.
The French arm of these joint ventures is the Vins Alcools et Spiritueux de France (VASF) entity, sometimes chaired by BGI and Castel Frères. However, Chen Guang later began to conflict with Castel and sought compensation through Chinese courts for his (Chen Guang) involvement in the arrangement, before alerting French authorities to possible wrongdoing by Castel.
“Castel invested $3 million in stakes in two Chinese companies — estimated to be closer to $25 million ten years later — without the French authorities knowing,” Sud Ouest’s report said. “They are never recorded on the VASF’s balance sheet. The profits they generate are credited annually to the accounts of the Gibraltar Castel subsidiary Zaida Corporation.”
French authorities initially launched an investigation in Bordeaux in 2012, although those investigations have had their ups and downs over the years, with the French National and International Audit Department (DVNI) initially asking VASF to pay 4 million euros in arrears before French authorities dropped the case in 2016.
Allegations of “false balance sheet presentation” (not listing joint venture shares) are still under investigation. Meanwhile, the French Financial Prosecutor’s Office (PNF) has taken up a “tax fraud money laundering” case (Castel via Gibraltar-based Zaida).
“Under questioning by Sud Ouest, the Castel Group was reluctant to answer on the merits of the case and insisted that at this stage, it is not the subject of any question other than the Bordeaux investigation,” the Sud Ouest newspaper said.
“This is a technical and accounting dispute,” Castel’s lawyers added.
Sud Ouest sees the case, and especially the relationship between Castel and Chen Guang, as complex – and the legal process between the two is even more so.
Post time: Aug-22-2022