Business

Local officials back Chinese investors, but watching as fraud accusations unfold

Founders Group International is creating or expanding on single-course memberships for a few of its courses, including Pine Lakes Country Club, where a special events director has been hired to focus on weddings and banquets.
Founders Group International is creating or expanding on single-course memberships for a few of its courses, including Pine Lakes Country Club, where a special events director has been hired to focus on weddings and banquets. jlee@thesunnews.com

Local officials are trying to learn more about reports that the Chinese government is investigating a company linked to Founders Group International -- owner of multiple Grand Strand businesses and 22 golf courses -- but say they don’t plan to curtail future courting of foreign investors.

Several Chinese publications and business websites are reporting that Yiqian Funding, the parent company of Founders Group, is accused of creating shell companies and Ponzi Schemes, prompting the Chinese government to raid two company offices and freeze some assets in its investigation of fraud. A Founders Group official said the actions in China won’t affect FGI properties along the Grand Strand.

Horry County Council Chairman Mark Lazarus said the news is concerning, but he is waiting to get more information as to whether the Chinese investigation would have any impact on Myrtle Beach area businesses or golf courses.

“I just don’t know what the issues are at this point and if it’s real or perceived,” Lazarus said. “Anything significant like that is concerning and can affect investors, obviously.”

Myrtle Beach Mayor John Rhodes and Lazarus visited a Yiqian business during a trip to China earlier this year to encourage more investment along the Grand Strand.

They say they have secured a $100 million pledge to build a Chinese cultural village, but that these investors are not linked to Founders Group or Yiqian.

“This is a totally different group of people, everything is different, this has no effect whatsoever on the cultural village,” Rhodes said.

The cultural village investors are planning to visit the Myrtle Beach area in late April or early May, at which point they are expected to sign contracts to begin developing the new tourist attraction, Lazarus said.

Bill Golden, president of Myrtle Beach Golf Holiday, said Founders Group has been a strong supporter of efforts to increase Myrtle Beach tourism since the company’s sizable purchase of the golf courses beginning in 2014, which includes Pine Lakes Country Club, Grande Dunes Resort Course and Founders Club at Pawleys Island.

Golden said he has discussed the reports directly with key officials from Founders Group International, and that he was assured Yiqian was “operating as normal.”

“From a tourism perspective, they are operating a great product with great services, and the day-to-day operations should not change at all,” Golden said. “We don’t anticipate any impact at all from a tourism perspective.”

Chinese officials reportedly raided two of Yiqian’s branch offices in Nanjing and the Shaoxing area of the Zhejiang, temporarily froze some assets, and detained some employees for questioning.

Nick Dou, president of Founders Group International, described the events as routine government inspections and said that none of their 500 branch offices in China have been closed by the government.

Founders Group is a U.S. registered company, and Dou says it will not be impacted by any potential issues the parent company faces in China.

“Founders Group International is a completely separate company from Yiqian with a completely separate group of investors,” Dou said in a statement to The Sun News Friday.

One of the media reports from Bowen Press reported that Yiqian is accused of defrauding investors by transferring money to a U.S. branch company that purchased golf courses, hotels, mansions and yachts and then resold the purchases back to Yiqian investors at inflated prices.

Dou said that reference is not directed at Founders Group International.

Audrey Hudson: 843-444-1765, @AudreyHudson

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