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MVP RV Investor Chung Faces Financial Setbacks
Posted By RV Business On January 17, 2012 @ 9:02 am In Breaking News,News In Focus | No Comments
Winston Chung came to Southern California two years ago like a standard-bearer for the new China, a wealthy Hong Kong entrepreneur with visions of creating an electric vehicle industry by reviving struggling manufacturing firms including Riverside-based MVP RV Inc.
Some dreams rolled out as planned, according to a report in the Los Angeles Times. The battery scientist and clean-energy promoter bought control of four Southland specialty vehicle makers. UC Riverside renamed a building as Winston Chung Hall, saying that the $13 million he provided for green power research was the biggest donation in campus history.
But other ventures skidded off course, the biggest failure being a bid to step into the social spotlight by purchasing the Balboa Bay Club and Resort, a Rat Pack-era landmark where Republican power brokers mingled and John Wayne tossed back Conmemorativo tequila. A seven-figure deposit Chung made in June on a Newport Harbor mansion once owned by actor Nicolas Cage is also in jeopardy because he never came up with the money to complete the purchase.
The $174.5-million deal for the combination yacht club and hotel and its sister Newport Beach Country Club was called off Friday (Jan. 13). Chung never came up with the money as agreed, forfeiting what city documents show was a nonrefundable $4-million down payment.
“We were told he was having difficulty moving money out of China,” David Wooten, chief executive of the clubs, said Monday. The deal could be revived if Chung produces the cash, but for now, competing offers will be considered, he said.
The setbacks are bad news for Brad Williams, president and CEO of MVP RV, a builder of motorhomes and trailers.
A plan to increase manufacturing at the company, with the four-year goal of selling $5 billion in tour buses and campers to newly wealthy Chinese consumers, has been on hold for a year while awaiting approval from Chinese regulators.
The Los Angeles Times reported that Williams said that about $30 million from a Chinese investment group that included Chung rescued his idled company in 2010. Among other things, the backing enabled MVP to buy a 24-acre Riverside manufacturing complex from bankrupt RV giant Fleetwood Enterprises Inc.
But an additional $310 million in funding that Chung had pledged to jump-start production appears to be in jeopardy. At the very least, it won’t flow until Chinese authorities approve the design of the tour buses and campers that MVP hoped to sell in China.
Williams, who had talked of generating 1,200 jobs in the economically battered Inland Empire — a deal the White House praised as an emblem of U.S.-China cooperation — expressed frustrations in an interview last year.
“I’m dying to start hiring and I can’t,” he said.
Chung, 53, whose companies in the south China boom town of Shenzhen make products such as electric vehicle power trains and storage batteries for power plants, insisted early this month that the setbacks in Southern California would be temporary.
He blamed the delays on Chinese government reviews. Cash for the Balboa Bay Club and the waterfront estate was being held up by China’s State Administration of Foreign Exchange, Chung said. His plan to sell U.S. motorhomes in China was waiting approval from the country’s Ministry of Commerce.
In telephone interviews, he said Chinese authorities had assured him that approvals would be forthcoming in time for him to buy the properties and to start manufacturing motorhomes in March.
“One-hundred percent certain they’re going to go through,” Chung said of his pending deals. A spokeswoman declined to comment further Monday.
Aaron Brickman, a U.S. Commerce Department official overseeing a program to stimulate foreign investment, said difficulties in getting funds out of China are not surprising. Unlike major Western countries, China controls the outward flow of cash as well as money coming into the country.
“China is still becoming comfortable with its own evolution regarding capital flow and investments,” Brickman said.
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