Then-president of Saipan company arrested in China

A then-president of a company that operates a store and restaurant on Saipan was arrested in China in 2013 for embezzlement and theft, among other charges, according to attorney Samuel Mok.

Now the company, Universal Group Development Inc. (Saipan), is suing its former president and shareholder, Wanzhong Yu, for conversion and the First Hawaiian Bank for breach of contract.

Universal Group, through counsel Mok, alleged that Yu and First Hawaiian Bank caused the company to be unable to access $225,000 of its own funds from a business savings account.

Universal Group asked the Superior Court to issue a declaration that the company is the lawful owner of the funds contained in the business savings account. Universal Group also asked the court to order the bank to allow the company immediate access to the account.

The company also wants the court to stop the bank from allowing Yu access to the account.

The plaintiff is demanding unspecified damages, interests, court costs, and attorney’s fees.

Universal Group operates the Hailan Market and Oriental Dumpling Restaurant on Saipan.

According to Mok in the complaint, Universal Group held a “maximize savings” business account with First Hawaiian Bank under an account that as of Oct. 17, 2014 had a balance of $224,558.71.

From 1995 to 2007, Yu was an officer and shareholder of Universal Group. In 1997, he became president and continued in that capacity until 2007.

Mok said that, in 2007, Yu resigned as president but continued to act as one against the wishes of the company’s shareholders and directors who were mostly situated in China.

From 2007 to the present, Mok said, Yu refused to allow access to the books and records of the company to the directors and failed to distribute any dividends or profits to the shareholders.

He said Yu operated Universal Group without lawful corporate authority and kept all the profits of the company for himself.

Mok disclosed that when Yu traveled to China in November 2013, Chinese law enforcement authorities arrested him and brought him before a Chinese court to answer the criminal charges such as embezzlement and theft, among others.

At that juncture, Mok said, Yu agreed to resign—again—as president of Universal Group and transferred his shares in the company to another officer of the corporation.

Unknown to the company, however, Yu allegedly wrote a letter to First Hawaiian Bank requesting that the business savings account be frozen so that one else other than himself could access the funds.

On Nov. 17, 2014, Universal Group, through its vice president and secretary Mingnan Jin, attempted to wire transfer money from the business savings account to the business bank account belonging to Universal Group’s corporate parent located in China.

Mok said Jin was an authorized signatory to the business savings account but First Hawaiian Bank refused to effectuate the wire transfer as requested.

Initially, Mok said, the bank told Jin that the wire transfer could not be executed because it purportedly needed to be authorized by the branch manager who was not allegedly present in the bank at that time.

The next day, Jin returned to the bank to follow up on his wire transfer request but was told by the branch manager that he needed to bring additional documents with him showing that he was authorized to act on Universal Group’s behalf.

The next day, Jin returned to the bank for the third day in a row with the documents requested by the branch manager.

At this point, Mok said, without even looking at the documents, the bank’s branch manager stated that she needed to get approval from the general manager in Guam.

The next day, Jin returned to the bank and the branch manager told him that the wire transfer would not be executed.

According to the bank, Mok said, the plaintiff’s former president, Yu, had written an unspecified “letter” requesting that the bank to “freeze” the business savings account at issue.

Mok said this “letter” was never shown to the company despite numerous demands.

On Nov. 28, 2014, Universal Group forwarded a letter though its attorney to the bank requesting that the company be given access to the bank account.

In support of the request, the company annexed numerous corporate documents showing that Jin was the bona fide officer of the corporation and authorized to conduct banking transactions.

By letter dated Dec. 22, 2014, the bank indicated it was authorized to freeze the account due to a “dispute” over its ownership pursuant to the bank’s deposit rules and regulations.

Mok alleged that it does not appear that the bank has taken any concrete, good faith steps to resolve the dispute at issue, including any semblance of an investigation.

To date, the lawyer said, the bank has refused to allow Universal Group access to its own bank account solely on the unsubstantiated and undisclosed request of Yu.