South China Morning Post

Update: A Canadian Tribunal has ruled that China’s allegations against Michael Ching have not been established, putting him on the path to Canadian citizenship.

The article you searched was the subject of a defamation claim by Michael Ching against the SCMP, resolved by a settlement requiring readers to acknowledge subsequent Canadian developments.

To read more about those developments, click here.

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Exclusive | Linda Ching, teenage daughter of Chinese corruption suspect Michael Ching, transferred US$1 million to Titanic firm weeks before graft allegations emerged

SCMP INVESTIGATION: Canadian student Linda Ching is helping finance the merger of Nasdaq-listed Premier Exhibitions and Dinoking Tech, in a deal struck just before China’s pursuit of father Michael Ching Mo Yeung was revealed

UPDATE: Michael Ching Mo Yeung has commenced legal proceedings against South China Morning Post in the Supreme Court of British Columbia.  Mr Ching alleges in his lawsuit that this article contains false and defamatory statements, and that the conduct of South China Morning Post and its reporter was malicious, reprehensible, high-handed, and blameworthy.

The teenage daughter of Chinese corruption suspect Michael Ching Mo Yeung transferred US$1 million (HK$7.75 million) out of Canada and used it to fund the merger of a Nasdaq-listed US firm, an investigation by the South China Morning Post has revealed.

A generically named numbered company set up with student Linda Ching as its sole director made the transfer on April 2 - less than a month before China’s pursuit of her father went public - and the money was invested in Premier Exhibitions, the listed US company that owns the salvage rights to the Titanic and a trove of artifacts from the wreck.

The transaction was uncovered in Canadian and US securities filings related to Premier’s merger with a Canadian firm, Dinoking Tech. Linda Ching’s firm, 1030443 BC Ltd,  is part of an investor group represented by Dinoking founder Bao Daoping, who is due to take over as Premier’s executive chairman, president and CEO.
Bao Daoping, the incoming president and CEO of Premier Exhibitions, meets Prince Charles at an exhibition of Canadian art in London in 2014. Bao acted on behalf of Linda Ching’s firm and other lenders when they invested in Premier as part of its merger with Bao’s Dinoking Tech. Photo: Dinoking

Premier executives have failed to respond to the Post’s questions about the deal over the past week and it is not clear whether Premier executives were aware of Linda Ching’s background before the Post informed them. Shareholder approval is required for the public company’s merger.

Premier was cash-strapped and suffering a slumping share price when  Bao, a Vancouver-area businessman, stepped in with his merger offer, which included a crucial US$13.5 million injection of funds by the investor group. Bao acted as an agent on behalf of Linda Ching’s firm and the investor group’s other three members, according to documents filed with the US Securities and Exchange Commission (SEC).

READ MORE: ‘Titanic’ shareholders cast doubt on merger, stunned that corruption suspect’s teenage daughter is financier

Reached on his cell phone last week, Bao confirmed he had received the Post’s emailed questions about the deal, but said he could not immediately respond. “I cannot talk, I’m sorry, I’m in a meeting,” he said.

Linda Ching is a student at the University of British Columbia.

Asked if he knew Linda Ching - aged 18 at the time of the deal - was the investor behind 1030443 BC Ltd, Bao hung up. A BC company registration search has confirmed that Linda Ching is the firm’s sole director.

Dinoking’s lawyer Catherine Wade said on Monday: “As the transaction is ongoing and not yet completed, we are not in a position to discuss any matter that is not on the public record and as such cannot provide comment.”

Premier had said it expected the merger to be completed last month.

Linda Ching’s father was included on a “100 most wanted” list on April 22 as part of Beijing’s Operation Skynet corruption crackdown, under the name “Cheng Muyang”. The next week, the Post reported that Michael Ching – a prominent Vancouver property developer – is the same man as Cheng Muyang.

He is wanted by China for alleged embezzlement and concealing and transferring illegal gains, all of which he denies. The Post does not have evidence of his guilt or innocence, and nor does it suggest wrongdoing by his daughter.

Neither Michael nor Linda Ching responded to the Post’s emailed enquiries, which were also lodged with Michael Ching’s lawyers.

The US SEC filings show that Linda Ching’s investment is entitled to a return of 12 per cent when it matures on April 2 next year. The funds will not be repaid directly to Linda Ching or the other three investors; instead, Bao will be paid on their behalf and the investors will receive stock in the merged firm in exchange.

A separate disclosure document, signed by interim Premier CEO Michael Little, was filed on April 15 with the BC Securities Commission (BCSC). It lists “Chung-Lin Ching” as the contact person for 1030443 BC Ltd, along with a phone number previously used by Michael Ching. Linda Ching’s Cantonese legal name is Chung Lin Ching.

Michael Ching Mo Yeung, who is wanted for alleged corruption by China.

Don Wyant, a Premier executive listed as the deal’s contact person on the BCSC document, would not say whether he was aware that 1030443’s sole director was the daughter of a corruption suspect. “I can’t talk about it right now,” he said before hanging up on Monday.

The merger contract was signed by Bao and Premier’s chairman and largest shareholder, Mark Sellers. It incorrectly identifies Ching’s firm as “103443 BC Ltd”, but the firm is correctly named as “1030443 BC Ltd” in the deal’s accompanying promissory note.
Premier and Dinoking both stage museum-type exhibits around the world, with Premier best known for displays of its Titanic artifacts, reportedly worth more than US$218 million. Dinoking’s main business involves animatronic dinosaur shows.

WATCH: Titanic, The Artifact Exhibition, by Premier Exhibitions

The terms of the investor group’s deal with Premier explicitly rule out a jury trial in the event of a dispute.

“Each party acknowledges and agrees that any controversy which may arise under this agreement is likely to involve complicated and difficult issues,” says the promissory note in bold capital letters, “and therefore each such party hereby irrevocably and unconditionally waives any right such party may have to a trial by jury in respect of any proceedings directly or indirectly arising out of or relating to this agreement, or the transactions contemplated by this agreement.”

The other three members of Bao’s investor group are a named individual residing in the Vancouver region - whose identity the Post has been unable to confirm – and two companies registered in the British Virgin Islands, where ownership can be kept secret.

"By combining Premier's assets with [Dinoking's], we've created a stronger company with the scope and capabilities to leverage long-term growth opportunities in the marketplace, including Asia,” said Sellers, in an April 2 press release. “Daoping Bao has a track record of success and fiscal discipline in the exhibition business and we're excited to have him oversee the combined company.”

Neither Sellers nor Little, Premier’s interim CEO, responded to voicemails about Linda Ching’s role in the merger.

A disclosure form filed with the BC Securities Commission in April identifies “Chung-Lin Ching” as the contact person for 1030443 BC Ltd regarding its investment. The address is that of a lawyer’s firm; the phone number, which the SCMP has obscured, has also previously been used by Michael Ching Mo Yeung. Source: BCSC
The registration of 1030443 BC Ltd shows Chung-lin Ching is the firm’s sole director. Her address on Vancouver’s 51st Avenue, obscured by the SCMP, is also that of Michael Ching. Source: BC Registry Services
Michael Ching, 45, is the president and CEO of Mo Yeung International Enterprise Ltd, which is behind major projects such as the International Trade Centre  in Richmond, scheduled to open near Vancouver’s international airport in 2017.

Chinese authorities have been pursuing him for more than a decade. He is the son of disgraced Hebei communist party chief Cheng Weigao, who was himself investigated for corruption and expelled from the party in 2003. Cheng Weigao died in 2010.

Michael Ching is now fighting for refugee status in Canada, having long been denied citizenship. Linda Ching was born in China but became a Canadian citizen in 2004.

 

How the SCMP traced Linda Ching’s investment

 

She is a US$1million investor in the merger of Premier Exhibitions and Dinoking Tech, but Linda Ching, daughter of Chinese corruption suspect Michael Ching Mo Yeung, is not identified in any documents related to the deal filed with the US Securities and Exchange Commission.

The Post discovered her funding of the merger only after making a lengthy series of connections that began with a single phone number.

An internet search related to her father’s activities yielded a PDF flyer posted online in 2011 by the Richmond Mandarin Lion’s Club. The flyer, advertising a charity bowling tournament, included a phone number for a “Michael Ching”, who was the event’s co-chair.

Searches of that phone number led to a specialist aviation website, where it was listed as belonging to “M. Ching”, registered operator of an airstrip on Cortes Island, near Vancouver. That airstrip is part of a 65-hectare property purchased in 2013 by Michael Ching Mo Yeung.

WATCH: Michael Ching's Cortes Island property

With the phone number confirmed as belonging to Michael Ching Mo Yeung, further searches related to the number turned up a document filed with the BC Securities Commission outlining an investment of US$1 million (C$1,258,500 at the time) by 1030443 BC Ltd in Florida firm Premier Exhibitions. The phone number was listed in the BCSC document as that of the firm’s “contact person”, “Chung-Lin Ching”; Linda Ching’s legal name is Chung Lin Ching.

A company registration search showed that 1030443 BC Ltd was incorporated on March 14, with Chung-lin Ching the sole director. The incorporation document listed her personal mailing address on Vancouver’s West 51st Avenue, the same house where Michael Ching reportedly lives; the firm’s mailing address is a Richmond, BC, lawyer’s office that is also listed by the Yellow Pages as an address for Mo Yeung International Enterprise, Michael Ching’s company.
“M. Ching” is shown as the registered operator of an airstrip on Cortes Island. The phone number that has been obscured by the SCMP is the same number used in a BC Securities declaration relating to 1030443 BC Ltd’s investment in Premier Exhibitions. Photo: SkyVector

Further searches related to 1030443 BC Ltd yielded documents lodged with the US Securities and Exchange Commission, that showed the investment was linked to the merger of Premier Exhibitions and Dinoking Tech.

Linda Ching and other investors were issued stock-convertible debentures in return for their vital cash injection of US$13.5 million, of which US$8 million will pay off existing debt and US$5.5 million will be spent on completing Premier’s new exhibition projects and used as working capital. Dinoking and the investor group will have the right to nominate four out of seven Premier board members.

Correction: A previous version of this story incorrectly described Mark Sellers as the majority shareholder of Premier Exhibitions. He controls the largest shareholding, but not a majority.

UPDATE: On August 23, 2016, Interpol concluded that data registered in its files concerning Michael Ching Mo Yeung was not compliant with Interpol’s rules and, accordingly, the data  including the Interpol “red notice” previously issued was deleted.

 

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