Din Tai Fung operator in China allegedly embezzled S$19.3 million, 14 outlets abruptly closed doors

Taiwanese restaurant brand Din Tai Fung's sudden, controversial exit from the northern China market in October 2024 has now escalated into a legal battle.

Beijing Hengtai Feng Catering, which operates Din Tai Fung restaurants in northern China, then attributed the closure of all 14 outlets in the region to the expiration of operating licence and the board’s disagreement over renewing it.

Following the move, there were many leadership changes on the board, including the replacement of the chairman, Han Jia Chen.

After taking office, the new chairman Lin Li Hong reviewed the company's accounts and allegedly found some discrepancies, Taiwan's Mirror Media reported.

His discoveries recently led him to file a lawsuit against his predecessor, Han, for alleged embezzlement and breach of trust.

Missing funds

Lin claimed that between 2013 and 2022, about NT$465 million (S$18.7 million) from the company was transferred to several other companies, including two that Han invested in and established.

This sum was supposedly said to have been used to pay the salaries of employees, but after checking against salary records, about NT$180 million (S$7.2 million) of this sum was not accounted for.

From 2023, the parent company of Hengtai Feng repeatedly contacted the two companies Han invested in for financial statements, but they never responded.

They were reportedly dissolved by Han in 2024.

Another NT$280 million (S$11.2 million) in cash, originally in the company accounts, was also allegedly missing, according to Mirror Media.

Han was also accused of transferring RMB 5 million (S$906,000) from the company to a Beijing law firm even after he was dismissed, bringing the total amount of unexplained cash flow to about S$19.3 million.

Lawsuits

Han has denied the allegations and counter-sued Lin and one of Hengtai Feng's major shareholders for defamation.

The case will be handled by the Taipei District Prosecutors Office, which is currently reviewing the company accounts again.

In a comment quoted by Mirror Media, Lin said that Han was impeding operations and trying to ruin the Din Tai Fung brand, and his actions were harming not only the shareholders but also Taiwanese businesses.

Top images from Din Tai Fung's website and Mirror Media