400 million yuan is gone! Because she did this, Zhang Lan lost the asset lawsuit | CVC | Zhang Lan
A few months ago, a lawsuit with European private equity firm CVC Capital Partners pushed the founder of South Beauty, Zhang Lan, to the forefront of the controversy. Now, this entanglement involving the breakdown of family trusts and huge debts has entered a new chapter.
In November 2022, Zhang Lan's overseas family trust was "breached" and a lawsuit was filed. The Singapore High Court determined that Zhang Lan was the actual owner of the assets in the bank account where his offshore family trust was located, and therefore agreed to CVC's application to appoint a receiver. Subsequently, Zhang Lan publicly stated that she would continue to appeal.
Recently, the latest judgment document disclosed by the High Court of Singapore shows that Zhang Lan's appeal has been rejected and the original verdict has been upheld. This also means that the total amount of approximately $55.37 million in its foreign bank accounts will ultimately be taken over by CVC.
Screenshot of Zhang Lan's Tiktok account.
Zhang Lan's multiple self transfers of funds have become crucial
According to the court documents, the issue of beneficial ownership of funds and assets in SETL bank accounts has been the focus of debate among various parties in this multiple lawsuit. In the latest ruling, the judge still determined that Zhang Lan is the beneficial owner of the assets.
What is SETL? This can be traced back to Zhang Lan's "South Beauty Era".
According to media reports, in 2014, CVC acquired 82.7% of the equity in South Beauty, becoming its largest shareholder. In the same year, Zhang Lan, who realized the business risks of South Beauty, registered the family trust shell company Success Elegant Trading Limited in the British Virgin Islands for her son Wang Xiaofei and other children in order to achieve property preservation and inheritance. Based on this, she established the offshore trust The Success Elegant Trust.
The screenshot is from the latest judgment disclosed by the High Court of Singapore.
The honeymoon period after acquiring equity is not long. In March 2015, CVC filed a lawsuit in a Hong Kong court, claiming that the whereabouts of the large amount of funds paid to South Beauty were unknown; Zhang Lan claimed that the other party was falsely accused and that she was "calculated by CVC", believing that "there is no sufficient evidence to prove the actual risk of asset loss". Both sides had their own opinions, and at one point, there was a legal dispute.
The court ultimately rejected Zhang Lan's claim, stating that CVC had paid a considerable amount of cash but was unaware of its whereabouts, and issued a decision to freeze the assets. The judgment reveals that in April 2019, CVC obtained an arbitration award against Zhang Lan and her two affiliated companies with a winning amount of over 140 million US dollars.
In order to recover the debt, CVC not only took action against Zhang Lan's apartment in New York, but also targeted Zhang Lan's family trust. The High Court of Singapore has determined that Zhang Lan is the actual owner of the assets in the bank account where his offshore family trust is located, and therefore has agreed to CVC's application for the appointment of a receiver; Zhang Lan believes that the beneficiaries of SETL are her son Wang Xiaofei and his children, and this money has nothing to do with Zhang Lan, so CVC has no right to take over.
The latest judgment document lists the details of Zhang Lan's multiple self transfers of funds. For example, between 2014 and 2015, in the absence of evidence to suggest that the trustee issued instructions, Zhang Lan instructed SETL's CS account to transfer multiple funds externally, most of which were transferred to her personal account.
The screenshot is from the latest judgment disclosed by the High Court of Singapore.
Regarding the reasons for these transfers, Zhang Lan explained that she was unable to find the relevant documents related to the transfers and could not recall the purpose of these transfers; And the remaining few transactions are for the benefit of Wang Xiaofei. The judge did not accept these explanations, believing that it was not reasonable to not remember the purpose of the huge transfer, and did not see any necessity for Zhang Lan to receive the payment on behalf of Wang Xiaofei.
The judgment also pointed out that after the Hong Kong court issued an asset freeze order against Zhang Lan, Zhang Lan transferred multiple funds from SETL's DB account, some of which seemed to still not be supported by corresponding trustee instructions or resolutions, and this behavior was judged as her manifestation of treating trust assets as her own property. Based on some of Zhang Lan's substantive actions, a judge of the Singapore High Court believes that Zhang Lan's appeal should be dismissed.
Farewell to the beautiful Jiangnan, "Battle Again" Ma Liuji
On the 10th, a journalist from China News Finance consulted with Zhang Lan's staff regarding the rejection of the appeal, but as of the time of publication, no response was received. But in March of this year, Zhang Lan herself responded to issues related to the CVC fund during a live broadcast.
Zhang Lan said, "I didn't calculate on others, so it's not embarrassing. This shows that I did a good job. When the pigs were fattened, the wolves came." "It's the CVC fund that owes me, and I don't owe anyone."
Regarding the questioning that "family trusts are established for risk avoidance", Zhang Lan denied the claims of "risk avoidance" and "asset transfer" in an interview, and stated that the reason for establishing a family trust is for the inheritance of the brand and to pass on the enterprise from generation to generation.
But she also made early plans for an unfavorable outcome: "Even if we lose this lawsuit and lose the family trust funds, it doesn't matter. The virtues and qualities inherited by future generations are more important."
Although there are many controversies, Zhang Lan has always maintained a pragmatic style of not caring about external opinions and only focusing on achieving goals. This personality has also been described by netizens as "others throwing mud at me, I plant lotus flowers with mud, and sell lotus roots for money.".
It's like even when explaining the issue of huge foreign debts during live broadcasts, Zhang Lan never forgot to hold up her own brand of cold noodles and appear on camera. Although Zhang Lan still regards "losing Qiao Jiangnan" as the darkest moment of entrepreneurship, it seems that she has gradually accepted that Qiao Jiangnan has become a thing of the past, and what she most misses in her heart has become Ma Liuji, who is dedicated to promoting her products.
Since 2020, Zhang Lan has uploaded videos and brought goods live in Tiktok, and has been calling Ma Liuji hard as a "spokesperson". At the age of 65, she still started her own business again in the live broadcast room like a young person, relying on her eloquence and personality to charge at the forefront of traffic monetization.
Besides, she is also well versed in the art of traffic and has a natural talent for teasing. Wang Xiaofei and Big S launched a war of war. She painted Soy egg and green tea on the mattress and sold anti stripping shampoo; During the "Huang Zijiao Exposed Size S" incident, she played the background music of "Good Days" and put on the shelves a yangmei juice called "Yangmei Rabbit Qi".
According to third-party data, after 14:00 on June 19th, the traffic in Zhang Lan's live broadcast room skyrocketed, with a peak of 220000 online viewers and a total of over 33.157 million views. The average online audience was 79000, with 292000 bullet comments released. The average length of audience stay was 1 minute and 51 seconds, exceeding 73% of the day's anchors.
"I am not an internet celebrity. Internet celebrities are temporary, I am lifelong." Zhang Lan once spoke so arrogantly on a forum in April. Nowadays, it seems that there are still many challenges in front of the protagonist "Zhanlan", who is ready to fight for a lifetime.
