Judge Rules Tsang/Renfrew Case Can Take Place In Canada

by Mike Godfrey, Tax-News.com, Washington

12 August 2003

A Canadian judge ruled last week that the case against offshore bank, Renfrew, which froze US$1 million belonging to an accused Chinese smuggler and his wife can take place in British Columbia.

"The presence of a representative office within the province establishes that Renfrew has assets within the province," Justice Grant Burnyeat of the B.C. Supreme Court explained, adding that the only witnesses in the case are located in the territory.

The case itself centres on a transaction undertaken by Tsang Ming Na, the wife of notorious Chinese businessman Lai Chang Xing who is wanted by China's authorities on charges of orchestrating a massive smuggling operation.

Tsang is suing her former lawyer, Grant Q.N. Meng, who arranged to transfer $1 million of her money through Vancouver businessman Bumen Shefik into a one year deposit account bearing an interest rate of 6% in Nicosia, Cyprus. Before the money was withdrawn however, the Chinese couple were arrested by Canadian immigration officials on outstanding warrants in November 2000.

Last month, Tsang's suit against Shefik was dismissed by a judge who said he was acting wholly as a representative of Renfrew offshore bank.

In the current case, it is being argued that the Canadian authorities have been lax in their monitoring of offshore banks operating inside the country. "The important finding here is that the Renfrew bank was actually doing business in B.C. and they have been doing it for quite a while," Alnoor Gangji, lawyer for Tsang announced.

Meanwhile, Renfrew's lawyers argue that the firm does not operate as a bank in the conventional sense, as it does not directly take deposits in Canada and merely advises clients to deposit funds offshore. Therefore, Renfrew argues, it does not have to conform to Canadian banking regulations.