A 1963 Ferrari 250 GTO
Some of the rarest cars in the world are at the heart of a London lawsuit embroiling an associate of one of China’s wealthiest men.
Zhao Hua Chen, who court filings say works for Chinese aluminum billionaire Zhongtian Liu, has accused Eric Po Chi Shen of buying real estate, rare red diamonds and super cars with money he embezzled while acting as his financial adviser, according to court documents filed in London’s High Court.
At stake in the case is ownership of two classic cars that could be worth as much as USD87 million. Chen says his former business associate falsified his financial reports and lied about how much he spent on property deals, before using the spoils to buy a 1998 McLaren F1 and a 1963 Ferrari 250 GTO Berlinetta. He is asking a judge in the British capital to order the cars to be sold or handed over to him.
The case, which was filed in September and is being heard in the U.K. because the cars are in storage outside London, is running at the same time as a lawsuit in Texas over money and diamonds. Chen alleges that Shen bought red diamonds with further embezzled funds, claiming he has the diamonds in his possession in Hong Kong.
“The cars involved in the suit are of extraordinary economic value but they are also of extraordinary interest in themselves,” Robert Dougans, a lawyer for Chen at the Bryan Cave law firm, said in an interview. There are only four or five other similar Ferraris worldwide, co-counsel Charles Pok said.
The 1963 Ferrari 250 GTO Berlinetta is likely worth around $25 million, according to John Collins, a classic Ferrari dealer at Talacrest. The model is a Series 2, he said in a telephone interview, with the Series 1 fetching at least $40 million. Both parties in the lawsuit say it is worth much more than that, with Shen saying it could fetch as much as $72 million.
The car has a colorful past, with previous owners including English TV and radio personality Chris Evans, a one-time host of the BBC’s Top Gear program, and car collector Jean Pierre Slavic, according to the Berlinetta website.
Only 39 of the Italian brand’s 250 GTOs were ever produced, one of which sold in 2013 for a record $52 million.
The McLaren, estimated to be worth as much as $15 million, has also seen its fair share of action. Court filings detail how Shen took it to Italy in May 2014 to participate in the McLaren Owners’ Tour of Italy, before crashing it into a tree on the first morning of the event. Mr. Bean star Rowan Atkinson was one of the first to come to Shen’s aid, according to press reports at the time.
Chen has chosen to make a claim to the cars rather than asking for money because of the significance of the vehicles themselves, Dougans said. The cash value of Ferraris has soared in recent years. The Hagerty Ferrari Index of 13 models has more than doubled since 2013, and a 1962 GTO 250 sold for $38.1 million in a 2014 auction, the most ever.
If the case goes to court, Chen’s lawyers will aim to prove that the cars were bought with money stolen from their client and the two sides will also debate whether a debt certificate signed by Shen was completed under duress.
Shen denies committing fraud and alleges that he only signed the debt certificate after he was repeatedly threatened by Zhongtian Liu, one of China’s wealthiest men and the owner of aluminum firm Zhongwang Holdings. Liu is worth an estimated $2.54 billion, according to Bloomberg’s Billionaires Index.
On one occasion, Liu allegedly told Shen that “someone might come up behind you with a needle and you might find yourself in a container,” Shen’s lawyers said. Shen says he believed Liu “could and would follow through on his threats” as he “believed that Mr. Liu had very substantial financial links to powerful figures” in China, the filing said.
Shen’s lawyers declined to comment on the case beyond what is in the filing, saying it had not been possible to reach their client. A spokesperson in China for Zhongwang said Mr. Liu “vigorously denies such allegations and believes them to be fabricated by an individual in the midst of litigation.”
The dramatic lawsuit seems unlikely to reach a speedy resolution, with Justice Marcus Smith saying in the most recent filing that he had “grave concerns” about the pleading of the case and allowing Chen another chance to sufficiently prove the ownership of the cars.
Meanwhile, the elite vehicles are being stored at the site of an old airport in Suffolk and Chen’s lawyers plan to pursue the claim.
“It’s not as if it was just property or stocks and shares held around London and New York and Singapore, it’s tangible assets that are of real interest to people and real rarity value,” Dougans said.
It’s not the first time a lawsuit has been brought over the Italian brand. A 17-year legal battle over a Ferrari worth $15.4 million was finally settled last April after descending into chaos, with lawsuits and counter-suits going four ways and ownership claims from Paraguay to Switzerland. Charlotte Ryan, Bloomberg
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