Call for fraud probe over Fergie’s theatre group

A THEATRE production company which counts the Duchess of York as a director has called in fraud investigators to probe a botched £7.5 million fundraise in China.

City sources said Gate Ventures has asked the Serious Fraud Office to investigate a fundraising effort it claims it asked a Chinese shareholder to carry out.

Gate – which has backed shows such as 42nd Street and Sunset Boulevard – has been in dispute with Zheng Yongxiong, a Chinese investor known as Quentin, since earlier this year.

The company, which is chaired by former BBC chairman Lord Grade, claims Zheng agreed t o raise £7.5 million for Gate but has failed to produce the cash, leaving it on the verge of going under. Zheng denies there was an agreement to raise funds for the company and says he did not collect any money.

Gate, which counts Sarah Ferguson as an executive director, narrowly avoided going under in September when a High Court judge threw out Zheng’s application to put the company into admini stration after he called in a £ 2.5 million loan early. Zheng is trying for a second time to force the company into administration.

Now Gate has reported its claims to the SFO, raising the prospect of a full-blown investigation into the row. Zheng and other Gate shareholders are also understood to have asked the SFO to investigate. The SFO declined to comment.

Geoff Morrow, Gate’s c hi e f executive and a songwriter who has penned hits for stars including Elvis Presley, said last week that Zheng’s appeal against the High Court decision is ‘ without merit’.

‘Our opinion is that this new legal action is...designed to detract from the non-payments. We will defend our position robustly again and expect the appeal to be rejected,’ Morrow said.

Lawyers for Zheng say he will cooperate with any investigation. They said he has no confidence in Gate’s board and their management of the company’s finances.

Gate accumulated thousands of Chinese individuals on its shareholder register when it listed on AIM in 2015.

In a bizarre turn of events, the share price soared before it was booted off the market when its City adviser quit and it failed to find a replacement.