Beneath the dramatic 2023 collapse of the Vancouver real-estate developer Coromandel Properties—which left C$700m ($497m) in debt spread over 16 properties—lies a strange tangle of alleged art and real estate fraud.
Interest in a 2023 lawsuit filed by Coromandel Properties’ part-owner Junchao Mo (who resides in Macau) and his sons against the company’s chief executive and co-owner, Jerry Zhong, which is ongoing in the Supreme Court of British Columbia (BC), was reawakened this month when one of the defendants, the lawyer Jason Wang and his law firm, asked to have three lawsuits against him, including this one, heard together. The judge granted his request, and the case was in court again.
The plaintiffs in the original lawsuit allege that Zhong lured Mo and his sons into investing in several of his Vancouver-area real-estate projects through five family trusts and three BC numbered companies. They also allege that Zhong used those funds to fraudulently acquire real estate as well as art, which were purchased from Vancouver galleries then allegedly used as collateral for a line of credit. According to publicly available court documents, the value of the art, acquired from the Centre of International Contemporary Art Vancouver (CICA) and Talisman Gallery, was C$6.9m ($4.9m).
According to the court documents, between April 2021 and March 2023, Zhong allegedly caused Coromandel Properties to purchase 12 paintings and two sculptures, among them four works each by the late American art star Jean-Michel Basquiat and the Spanish Pop artist Javier Calleja, as well as one work each by Rashid Johnson, George Condo, Sam Gilliam, Tania Marmolejo, Tammi Campbell and Jordy Kerwick. The lawsuit alleges that Zhong purchased the art while Coromandel Properties was in financial distress, used the art to secure a loan of up to $C3.3m ($2.4m) from a US bank and “drew on the line of credit and misappropriated the line of credit funds for his own use”. According to the claim, the art “was never displayed after Zhong orchestrated its purchase”.
“Mo was in a vulnerable position to Zhong in that he resides primarily outside of BC, does not speak English, entrusted Zhong to manage his Canadian business interests and the investment funds in Canada, and generally reposed great trust in Zhong,” the lawsuit states.
Zhong denies all allegations, saying in his response that he “did not engage in a conspiracy designed to embezzle, misappropriate or conceal investment funds, as alleged or at all”.
Missing art at centre of dispute
In an effort to ascertain the whereabouts of the art allegedly acquired by Zhong and Coromandel Properties, The Art Newspaper contacted lawyers for both the plaintiff and defendants in the case, who declined to comment as litigation is ongoing. The CICA and its executive director, Tony Hui Cao, did not respond to The Art Newspaper’s inquiries.
The CICA, which describes itself as a “non-profit, [Black, Indigenous and people of colour] and female-led and community-based multidisciplinary art organisation”, lists Coromandel Properties as one of its main corporate sponsors. The Talisman Gallery, which operated in 2023 as a kind of pop-up gallery in collaboration with developers and the CICA, does not appear to have a brick-and-mortar location or active presence online.
Coromandel Properties arrived on the Vancouver real-estate scene more than a decade ago with a grand vision for getting land assemblies rezoned for mixed-use and condo developments, while promoting itself as focused on long-term relationships built on trust. Its emergence coincided with a kind of golden age for real estate speculation, with money pouring into the Vancouver property market from Mainland China.
Coromandel Properties engaged in community relations by backing the popular Cherry Blossom Festival and joined big corporate names and philanthropists as a top-tier sponsor of the Vancouver Art Gallery. It was a lead sponsor and backer of major exhibitions there, including Claude Monet’s Secret Garden (2017) and its presentation of the traveling blockbuster Takashi Murakami: The Octopus Eats Its Own Leg (2018). A photograph appeared in local newspapers of a smiling Murakami posing next to Zhong, who also made donations to municipal political parties. In 2019, Coromandel Properties brought on the five-time Vancouver city councillor and former mayoral candidate Raymond Louie as its chief operating officer.
Around this time, when a foreign buyer’s tax slowed real estate sales, artists in Vancouver said their work was being supported by a growing group of collectors from China. Now, since a federal ban on foreign buyers was implemented in 2023, BC’s real estate market is on the verge of collapse, with many developers declaring bankruptcy. There are currently thousands of new condominium apartment units sitting empty across Vancouver. The federal ban on foreign buyers had been extended until 1 January 2027, though a new joint federal and provincial initiative that has been branded a “developer bailout” by critics was proposed last month. Few details of the proposal have been made publicly available.
As for the Coromandel Properties lawsuit, Mo has already filed for default judgments against two of the defendants who failed to file responses to the lawsuit; the plaintiffs will be questioned by defendants during examinations for discovery, as they try to determine how strong the cases and the witnesses are. Typically, lawsuits settle out of court and none of the details are made public under terms of the settlement. It remains to be seen if this case will make it to trial—or where the C$6.9m worth of art is.
