Unexplained loans of more than £500,000 to the Duchess of York from an investment company are a ‘matter for investigation,’ a high court judge was told.
Gate Ventures loaned Sarah Ferguson £287,577 and loaned £232,003 to her tea, dinnerware and jewellery company, Ginger & Moss, according to court documents seen by The Guardian.
The company is currently trying to avoid going into administration after an application was made by a shareholder who is owed £2.5million.
Zheng Youngxiong, known as Quentin, is applying for administrators to be brought in and claims an investigation into loans and payments given out by the company is necessary.
Zheng Yongxiong – known as Quentin – and the Duchess of York, pictured together in Windsor in 2017 is applying for administrators to be brought in and claims an investigation into loans and payments given out by the company is necessary
Gate Ventures, which is also alleged to have paid £4.7million in expenses to former chairman Dr Johnny Hon, wants the company to go into voluntary liquidation.
The main difference between the two procedures is that company administration aims to help the company repay debts in order to avoid insolvency, whereas liquidation is the process of selling all assets before dissolving the company completely.
Voluntary liquidation is instigated by the directors of a solvent company who want to close the company and sell the assets for the benefit of the creditors and shareholders.
Gate Ventures loaned Sarah Ferguson £287,577 and loaned £232,003 to her tea, dinnerware and jewellery company, Ginger & Moss, according to court documents seen by The Guardian
Conservative peer Lord Grade, who is the current chairman of the company, is now locked in a High Court battle
The company is now chaired by former BBC and ITV boss Lord Grade. Dr Hon resigned in December 2017.
Ferguson is a former director of Gate Ventures but resigned in December 2019.
Mr Youngxiong’s counsel, Matthew Parfitt, reportedly told Judge Prentis: ‘There were various transactions with the Duchess of York and entities related to her while she was a director of the company.
Grade is pictured here to the left of Zheng following an investor roadshow in the Far East
Mr Parfitt also recommended investigation into Dr Hon (pictured with Sarah Ferguson) invoicing £4,738,174 and being sold investments of £3,834,250
These included ‘a direct and unexplained loan of at least £287,577 to her personally’.
‘It is certainly a matter for investigation.’
Judge Prentis was also told there was ‘strong evidence that directors sought to exploit the company for their own personal interests’.
Mr Parfitt branded Gate Ventures ‘a company that loses money have over fist’ after it was revealed that although investors had handed over £24.5million, it had less than £5million left.
He also recommended investigation into Dr Hon invoicing £4,738,174 and being sold investments of £3,834,250.
On the list of expenses were private jet trips, lunches with the rich and famous and shopping sprees.
Mr Parfitt said: ‘£4.7million of shareholders’ money allowed Dr Hon to indulge in jet-setting, high fashion and political meetings’.
The company’s lawyers resigned last week as the company was not able to pay them, the court heard.
And as a result Lord Grade has been forced to represent the company in high court.
Gate Ventures reportedly has a claim against Mr Youngxiong over £7.9million that he owes the company.
He allegedly raised the money on behalf of the company but never paid it.
The judge was told that there were concerns that administrators chosen by Mr Youngxiong would not be independent.
The judge has heard Gate Ventures had an ‘e-commerce venture’ with Ginger & Moss.
The case has been adjourned until Friday.