Lawsuit targets hazardous-waste company owners

BIV's lawsuit of the week

Photo: Rob Kruyt

A trio of investment companies is suing the owners of a hazardous-waste company in China charged with illegal dumping, claiming West Vancouver residents Bing Bai, Sapphire Ma and Mu Qing Bai wrongfully used investment funds to buy or maintain several properties in the Lower Mainland.

Shanghai Zhong Jia Xing Hua Chuang Ye Investment LLP, Yangzhou Jia Hua Chuang Ye Investment Ltd. and Nantong Jian Hua Chuang Ye Investment LLP filed a notice of civil claim in BC Supreme Court on November 13. They claim Bing Bai and Sapphire Ma owned Liaoning Muchang International Environmental Protection Industry Co. Ltd., a hazardous-waste disposal firm in China.

The plaintiffs claim Bai “started ordering his employees to bury approximately 1,500 tons of hazardous waste directly under the soil” in September 2014, months before the plaintiffs signed two investment contracts worth $634 million with Bai, Mar and the company, which is not named as a defendant in the lawsuit.

The contracts, the companies claim, contained a buyback condition for the shares in Liaoning Muchang International should it not become publicly listed by the end of 2019. However, according to the lawsuit, company management was arrested by Chinese police for an “environmental pollution crime,” for which the company and its management team were convicted in October 2018.

“Neither the Defendant Bai nor the Defendant Ma had ever disclosed any information regarding the Crime, the Arrest, the Charge, the Initial Sentence, or the Final Sentence to the Plaintiffs,” the claim states. “The Defendants’ Company’s business has been so significantly impacted by the Crime that it failed to achieve the Profit Goals as the Defendant Bai and the Defendant Ma had guaranteed to the Plaintiffs in Contracts.”  The companies sued Bai in a Chinese court for breach of contract. Judgments were handed down in March for millions in share buyback proceeds. However, they claim the defendants used “some or all” of the investment proceeds to buy or maintain seven Metro Vancouver properties. The investment companies seek an order enforcing the foreign judgments for $8,222,230. The allegations have not been tested or proven in court and the defendants had not responded to the claim by press time.