Investigation on Macheng real estate corruption case: the developers involved in the case are still under construction (Figure)
On July 14th, the first city of Ronghui was still under construction, and the developer of the property, Yang Xiaoqi, was released on bail pending trial on suspicion of bribery. Photo by Chu Chaoxin
In Macheng, a national poverty-stricken county in Hubei Province, a series of corrupt officials were implicated by the bribing real estate agent, including Deng Xinsheng, secretary of Macheng Municipal Party Committee, Xu Shengxian, deputy mayor, Xia Guisong, director of the Municipal Construction Bureau, Xiong Wenjian, deputy director, and Tao Xingwen, secretary of the Municipal Real Estate Bureau.
On July 2, the corruption case in Macheng, Hubei Province was exposed.
The Macheng municipal government issued a notice saying that Deng Xinsheng, secretary of the municipal party committee, and Xu Shengxian, deputy mayor, had been double-detained and their posts had been revoked. Xia Guisong, director of the Municipal Construction Bureau, Tao Xingwen, secretary of the Municipal Real Estate Bureau, and Xiong Wenjian, deputy director of the Municipal Construction Bureau, were all investigated.
Officials of the local procuratorate said that the above officials were suspected of taking bribes, and the briber was a real estate agent.
Macheng, which has always been a poverty-stricken county in China, has made great efforts to develop real estate in recent years, with close contacts between officials and businessmen, and has taken land at a low price, illegally changed the plot ratio and the nature of land use.
After the Woan case was uncovered, Macheng began to carry out special rectification of real estate development.
Core tips
In Macheng, a poverty-stricken county in the northeast of Hubei Province, at the southern foot of the middle Dabie Mountains, an "official earthquake" occurred recently, and a series of officials were investigated one after another.
On July 2, the Macheng Municipal Government issued a notice saying that Deng Xinsheng, secretary of the Municipal Party Committee, was double-regulated by the Hubei Provincial Commission for Discipline Inspection on May 15 and was dismissed on June 1; Xu Shengxian, the deputy mayor in charge of urban construction in Macheng City, was double-checked by the Huanggang Municipal Commission for Discipline Inspection and was removed from office on June 8.
The circular also said that Xia Guisong, director of the Municipal Construction Bureau, was also "double-regulated"; Tao Xingwen, secretary of the Municipal Real Estate Bureau, and Xiong Wenjian, deputy director of the Municipal Construction Bureau, were placed on file for investigation by the Macheng City Procuratorate.
On July 17, Liu Qianqiao, deputy secretary of the Huanggang Municipal Commission for Discipline Inspection, told reporters that the fall of Deng Xinsheng and Xu Shengxian was related to real estate developers who paid bribes.
The real estate agent was arrested and uncovered.
Wu Jikun, a businessman from Fujian, was arrested for bribing while developing real estate in Tuanfeng County, which implicated a series of corrupt officials in Macheng.
Before Macheng issued the notice, the news that Deng Xinsheng and others had fallen off their horses had spread among local officials. It is said among officials that Wu Jikun was involved in the uncovering of the Wowo case.
Wu Jikun, a native of Fujian, is the first real estate developer introduced by Macheng. In 2001, he registered and established Fuxin Real Estate Development Company locally.
As an investment attraction project, Wu Jikun once told the media that he had received many preferential policies, whether it was bank loans or land replacement prices. For example, "the valve factory started to ask for a higher price, and then the city leaders personally came forward, and the two sides hit it off and signed a contract."
Wu Jikun once told the media: "I, a small investor, often get personal attention and care from leaders such as Deng Xinsheng. I feel flattered."
"We have long realized that there may be corruption in the field of real estate, but we have been unable to find a breakthrough." On July 14, a staff member of the Anti-Corruption Bureau of Macheng City Procuratorate said.
Wu Jikun became a breakthrough in the real estate corruption case.
It is said among local officials that Wu Jikun was arrested for developing a real estate project in the neighboring Tuanfeng County and sending money to local officials, and then he brought out people from the Construction Bureau and Housing Management Bureau in Macheng.
This statement has been recognized by Macheng City Procuratorate, Commission for Discipline Inspection and other departments.
Wang Guoyou, chief procurator of Macheng Procuratorate, said that the first officials arrested were Guo Jiangjun, the stationmaster of the quality inspection station under the Construction Bureau, and Cai Chunsong, the deputy stationmaster.
Subsequently, Xia Guisong, Xiong Wenjian, deputy directors of the Municipal Construction Bureau, and Tao Xingwen, secretary of the Municipal Real Estate Bureau, were successively investigated.
At the same time, another well-known local real estate developer, Yang Xiaoqi, is also controlled by the relevant departments.
As a result, higher-level officials were involved.
On May 15th, Deng Xinsheng, secretary of Macheng Municipal Party Committee, was informed to attend a meeting in Huanggang, and was taken away by Hubei Provincial Commission for Discipline Inspection just after the meeting.
Liu Qianqiao, deputy secretary of the Huanggang Municipal Commission for Discipline Inspection, said that the process of deputy mayor Xu Shengxian being double-regulated was very simple. The case-handling personnel of the Commission for Discipline Inspection called him and said that he was looking for him to investigate some situations. "He knew that he was looking for him and came on his own when he received the call."
The government acquiesced in privately changing the nature of land use.
Ronghui Real Estate Company has a close relationship with Macheng government. The company was accused of taking land at a low price and illegally changing the plot ratio and land use nature.
Yang Xiaoqi, another real estate agent in this case, is also from Fujian. His company, Ronghui Real Estate Company, runs one of the largest real estate projects in the local area, Ronghui First City.
Memorabilia on Ronghui’s website shows that the company has close ties with the local government. Since the establishment of Ronghui Company in September, 2004, Macheng officials have visited frequently, including 9 visits by Deng Xinsheng, 4 visits by Xu Shengxian, and many visits by Tao Xingwen and Xia Guisong.
On the evening of July 21st and 22nd, 2007, Ronghui Real Estate Company held a fireworks party to celebrate the capping of a building. Zhou Xiaohua, deputy secretary of Macheng Municipal Committee, Li Zhuyang, executive deputy mayor, Xu Shengxian, deputy mayor and officials from the Municipal Construction Bureau were present.
According to the company’s records, Deng Xinsheng went to Ronghui for the last time on March 4, 2009. On the same day, Deng accompanied Lv Dongsheng, Deputy Secretary-General of Hubei Provincial Party Committee and Director of Political Research Office of the Provincial Party Committee, to visit Ronghui.
A representative of Macheng Municipal People’s Congress introduced that Yang Xiaoqi was also a representative of Macheng Municipal People’s Congress.
According to some sources, Xiong Wenjian, deputy director of the Construction Bureau, was dismissed this time because he illegally adjusted the floor area ratio for real estate developers during his tenure as planning director.
On July 13th, Zhou Junliang, deputy director of Macheng Planning Bureau, introduced that in 2006, Yang Xiaoqi undertook the reconstruction of the cemetery road in the urban area, costing about 10 million yuan (according to the website of Ronghui Company, the investment in this road reconstruction was only 4 million yuan). In exchange, the municipal government and the Construction Bureau promised to increase the plot ratio of the real estate he developed later by 0.5.
The so-called increase in floor area ratio means building more buildings under the condition that the land development area remains unchanged, such as adding floors or occupying green space.
"Yang Xiaoqi has developed 206 mu of land in Macheng. If the plot ratio is all increased by 0.5, the profit will increase by nearly 100 million." Vilen, a local real estate agent, said.
Yang Xiaoqi’s first city of Ronghui was originally located in Macheng Textile Factory. A local official said that the land was acquired earlier and the price was extremely cheap.
According to a local developer in Macheng, Yang took the land in the name of industrial park development at that time, which later became real estate, and the land price was 50,000 yuan per mu. "And our local developers, the price of taking the same plot is hundreds of thousands per mu."
Zhan Shilong, president of Macheng Planning and Design Institute, said that Ronghui changed industrial land into residential land, but the government adopted a tacit attitude.
"He hasn’t paid a penny of supporting fees." Zhou Junliang, deputy director of Macheng Planning Bureau, said that this was also a problem investigated and dealt with by relevant departments after the incident.
Zhou Junliang also said that as far as he knows, one of the problems of the real estate bureau is that the pre-sale certificate was issued in advance before the developer’s procedures were full.