South Beauty Founder Zhang Lan May Escape Jail
Hang Yu
/SOURCE : yicai
South Beauty Founder Zhang Lan May Escape Jail

(Yicai Global) March 14 -- Zhang Lan, the founder of well-known Chinese catering service management company South Beauty Catering Management Group, was sentenced to one-year imprisonment by a Hong Kong court.

Whether she will go and surrender herself in Hong Kong to serve her sentence is uncertain, however, and so she may not necessarily go to jail, legal experts told Yicai Global.

The conviction stems from the acquisition of Beijing-based South Beauty by CVC Capital Partners, Europe's largest private equity fund company. CVC acquired an 83 percent stake in South Beauty Investment from Zhang for USD300 million in April 2014 and the two sides have been at loggerheads ever since.

The Hong Kong court granted CVC's application to freeze Zhang's private property in March 2015. The judge later found that Zhang failed to comply with an order to declare her assets with a net value of over HKD500,000 (USD63,700).

It ultimately ruled that Zhang was guilty of contempt of court in March last year. The judge who ordered her to serve one year behind bars on March 5 issued an arrest warrant against Zhang in her absence at the sentencing hearing.

Zhang's son Wang Xiaofei posted the statement, "Ms. Zhang Lan appealed to the Court of Appeal of the Hong Kong High Court on April 11 last year in response to the ruling of the trial division of the Hong Kong High Court. The case is still awaiting the court's scheduled hearing and the Court of Appeal has not yet finalized it" from Duan & Duan Law Firm on his Sina Weibo account yesterday.

The sentence against Zhang is still valid even if the Court of Appeal has not yet heard the case, and she must begin serving it immediately even if she has filed an appeal, a Hong Kong legal expert told Yicai Global.

The special administrative region has many extradition agreements, but these do not include mainland China, Macao and Taiwan. Thus, as long as Zhang does not set foot in Hong Kong, she will not go to jail, experts gave as the reason for her no-show in court.

She founded the high-end catering firm South Beauty in 2000 in a rags-to-riches tale, achieving great success to become one of the top tycoons in the Chinese restaurant sector. 

Editor: Ben Armour

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Keywords: South Beauty , Zhang Lan