A real estate development company has been fined 1.82 million
yuan (US$234,000) for illegal fundraising that incited an angry
crowd of homebuyers to smash public property last weekend in
southwest China's Chongqing Municipality.
Chongqing Environment Protection Construction Development
Corporation Ltd., the developer of a planned downtown property
project known as "Shangpin 16," was also told to refund more than
18 million yuan (US$2.3 million) it had raised from 2,700
homebuyers, said an official with the local bureau of land
resources and housing management.
In June, two months before the company was given the
government's go-ahead for the planned project, it collected a 6,666
yuan (US$855) down payment from each of the potential buyers,
promising them a preemptive right to choose apartments at a
discounted price.
Problems emerged because the planned project had only 1,158
apartments for sale.
The 2,700 homebuyers gathered at a stadium near the development
project on Aug. 5 for a proposed lucky draw to decide who must give
up the purchase plan.
However, the event was poorly organized and the unlucky
customers questioned its fairness. An angry crowd of several
hundred people smashed public property at the stadium and later
broke into the sales office to destroy more equipment.
The local bureau of land resources and housing management
immediately started an investigation, and demanded all illegally
raised funds be repaid.
The event has triggered an overhaul of Chongqing's real estate
market, and the bureau has ordered several additional developers to
repay illegally raised funds before Aug. 15 under penalty of
fines.
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(Xinhua News Agency August 10, 2007)