A British Virgin Islands court ruling could allow Chinese businessman Chen Zhi to regain control of his 28.55% stake in Habanos S.A., the Cuban cigar monopoly, and other international cigar businesses. Justice Gerhard Wallbank ruled that liquidation orders covering more than 30 entities linked to Chen should be discharged because the BVI Attorney General failed to provide admissible evidence supporting the applications. The entities include Simply Advanced Ltd., which holds Chen’s interest in Allied Cigar Corporation, the Madrid-based company that owns 50% of Habanos, two major cigar factories outside Cuba, and the VegaFina and Flor de Copán brands. Court-appointed liquidators from financial advisory firm Interpath had taken control of the entities in January following U.S. and British allegations that Chen was involved in a multibillion-dollar criminal enterprise. Chen has denied the allegations through a Prince Group spokesperson.
The ruling could halt plans to sell Chen’s interests, although the court called for an orderly implementation of its decision, and further legal proceedings in the United States and British Virgin Islands could affect the outcome. Chen’s representatives have also sought to remove U.S. court protections granted to Interpath. The ownership dispute follows European Union sanctions imposed on Chen in July, which have disrupted Cuban cigar distribution in Austria, Germany, and Poland. 5th Avenue Products Trading GmbH, the distributor in those markets, has been unable to ship cigars since early September and has filed for insolvency. The future ownership of Chen’s cigar interests remains unresolved.
