Restaurant target in drugs case

The Jin Hai Wan restaurant is caught up in a drugs case. Photo / Greg Bowker

Court told Auckland seafood eatery used as a cover in a $100m pseudoephedrine operation

A Chinese restaurant in downtown Auckland was allegedly used as a cover for a drug running enterprise.

Jin Hai Wan, a yum cha establishment in Wakefield St, is owned by Hui Zhang who faces charges of importing and supplying the Class B drug pseudoephedrine.

The 43-year-old was denied bail when he appeared in the Manukau District Court last week after a police investigation led to a $120 million drug haul.

The seafood eatery was under covert surveillance during Operation Ghost and became allegedly mixed up with the trading of drugs, the High Court has been told in a civil hearing.

A bank account for the restaurant holding $17,000 has been frozen under asset seizure legislation, but Zhang's defence lawyer has asked for funds to keep the business running.

Phil Hamlin said the restaurant needed the money to pay a $12,500 monthly lease and 20 staff who were unpaid since the bank account was frozen. While Mr Hamlin said the police alleged Jin Hai Wan was "partly a cover for the supply of drugs", he said the restaurant was a legitimate business which allegedly became "mixed up in the trading of drugs".

The chef was running the restaurant while Zhang was in custody and would need access to the $17,000, said Mr Hamlin.

He did not oppose the restraining orders against other property owned by his client.

Crown prosecutor David Johnstone said there was $250,000 of machinery and plants at the restaurant from a "questionable source of income", but the police were not seeking those assets.

Justice Graham Lang said he had sympathy for the restaurant and the staff who worked there. "If the $17,000 was from legitimate trading, then it would be wrong for the business to tip over without it."

But he would not remove the bank account from the restraining order without some evidence, which he asked Mr Hamlin to provide before another court hearing today.

Zhang was among more than 30 people arrested last week after an 18- month operation in which more than 330kg of pseudoephedrine was seized - which police say is enough to make $100 million worth of methamphetamine.

Homes, luxury cars and cash worth up to $20 million were also seized in the record-breaking bust and millions of dollars were gambled in the VIP lounge of SkyCity Casino.

Restraining orders were also granted against six others in the High Court, including three whom the Herald revealed are overseas.

Da Wen Shao, Yixin Gan, and Zhi Wei Yang are charged alongside others accused of pseudoephedrine offences but have not appeared in court.

Assets are held under the Criminal Proceeds (Recovery) Act which essentially forces someone to prove how an asset was paid for - even if they are acquitted on criminal charges.