For the last two years, property developers in Shanghai have
been worried about government policies aimed at cooling the market
- and eating up profits in the meantime.
Now, they may have to face an even worse headache.
According to news reports, the city's Party disciplinary
commission and government supervision department, have teamed up
with auditing, taxation and real estate departments for a thorough
investigation into possible legal and regulatory violations by
developers and officials.
On Monday, local newspapers reported that Yin Guoyuan, former
deputy director of the Shanghai Housing, Land and Resources
Administration Bureau, was expelled from the Party and transferred
to judicial department for his alleged crime.
Yin has been accused of helping others obtain lucrative land
deals in exchange for gifts including cash, company shares,
apartments and cars, local newspapers quoted sources from the
disciplinary commission of Shanghai Party Committee.
Yin was not the only senior local official and businessman
exposed in property market scandals.
Zhou Zhengyi, Shanghai's richest tycoon, Wu Minglie, chairman of
New Huangpu Group, and Zhu Wenjin, a section chief of the city's
land bureau, were also arrested in the last year for
corruption.
The ongoing investigation of illegal activities in the property
sector is focused around three kinds of cases, the 21st Century
Business Herald said, quoting inside sources.
The first type focuses on cases of illegal land leasing, or
selling land at low prices.
Before Shanghai started its public bidding for land a few years
ago, many land deals were concluded simply with guanxi, or personal
connections.
Many officials-turned-developers could become key suspects in
the wrongdoings. Some developers still hoard large tracts of lands
for profiteering.
The second type of cases could involve officials selling
sensitive information about the property market to developers,
including the improper disclosure of subway construction blueprints
before the plan was made public.
The third includes officials who have bought properties at
prices much lower than market level.
(China Daily May 23, 2007)