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Jailed Crafar farms bidder defaults on mortgage

A man jailed for his part in fraudulently trying to buy the Crafar farms has defaulted on a mortgage of a south Auckland property he owns and risks losing it.

In a High Court order published earlier this month, Ke En Chen, also known as Jack Chen, was told that he had until January 12 to pay $9800 he owes on a house on Magnolia Place in Flat Bush.

Should he fail to pay, the mortgagee, ASB Bank, will take possession of the property. It is not known how much Chen still owes on the mortgage.

Chen and his accomplices May Wang and Wenjye Yee were in 2016 handed sentences in Hong Kong after being found guilty of two charges each of conspiracy to commit fraud in connection with their attempt to buy the 22 North Island farms.

Chen was convicted for the additional offence of dealing with property known to be the proceeds of crime.

He was sentenced to seven and years nine months' jail, Wang - who was the face of the operation - to eight years and three months and Yee to five years' imprisonment.

In 2013, Chen's assets and several properties were frozen by a restraining order brought by Hong Kong authorities.

According to QV, the 255sq m Flat Bush property is now subject to a court order under the Criminal Proceeds (Recovery) Act.

The property had a capital value of $425,000 in 2005 and $940,000 in 2017.

At their sentencing in Hong Kong, Madam Justice Anthea Pang Po-kam said Chen and Wang were masterminds and prime movers of the fraud scams, which had a grave impact on the general public and the stock market.

The trio were also banned from managing companies for 10 years.

According to prosecutors, Wang and Chen induced Hong Kong-listed firm Natural Dairy to acquire the Crafar farms from one of her companies.

This company, according to prosecutors, did not own the farms but would purchase them with Natural Dairy's money in the name of another of Wang's firms.

Although the Crafar farms were on the brink of bankruptcy, Wang and Yee falsified accounts so they appeared to be in substantial profit.

The trio failed to declare that Chen and Wang had an agreement to share the commission arising from the sale and purchase of the Crafar farms.

Unaware of this relationship, and ignorant of the true state of the farm's finances, prosecutors said Natural Dairy approved the acquisition and in 2010 raised HK$955 million ($186 million) to finance it.

Later that year Wang was declared bankrupt in New Zealand and then arrested with Chen in Hong Kong. A week later, the Overseas Investment Office refused to grant permission for the purchase.

Sixteen of the Crafar farms were ultimately bought in 2012 by China's Shanghai Pengxin for an estimated $200 million.

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