[Caixin] Another Sichuan Businessman Investigated for Graft
Head of developer specializing in exhibition centers is third billionaire to face corruption inquiry this year
By staff reporters He Xin and Wang Chen
(Beijing) – A Sichuan property developer is being investigated by Communist Party anti-corruption officials, a source close to the situation says, the third billionaire to come under such scrutiny in the province this year.
Deng Hong, chairman of Chengdu Exhibition & Travel Group (ETG), was being investigated over corruption linked to land deals, the source said. It was unclear what specific organization was handling the inquiry.
Earlier media reports had said Deng was questioned in December by anti-corruption officials in connection with an investigation into Li Chuncheng, the former mayor of Chengdu. The inquiry into Li regarded “serious violation of the law,” the party’s Central Discipline Inspection Commission said on December 6.
“Last time (Deng) was asked to assist in the investigation, but this time he is the target,” the source close to the investigation said.
Deng has been in custody since early March, the source said.
His last public appearance was on February 19, when he met officials from Shanghai in Chengdu.
Deng is a well-known businessman in Sichuan who operates a wide range of exhibition and property projects across the southwestern province.
He is known to enjoy close ties to local officials. “Deng has lots of government support, but he is also very talented in doing business,” a Chengdu businessman said.
Deng, who was born in 1963, spent eight years in military. In 1985, he left the military and started his own business. Caixin has learned that the property business he started in late 1990s and all of his current projects involve the local government.
In 1997, Deng reached an agreement with officials in Jiniu District, in northwestern Chengdu, to build the Shawan Exhibition Center. The project was very successful, helping Deng make his first fortune.
A source in the Chengdu property sector said that exhibition centers were usually government projects that turned small profit margins. However, to attract private investors, the government allows them to develop commercial and residential projects on the same land.
In 2003, Deng started work on a center in suburban Chengdu that had a hotel, office building and entertainment and tourism facilities.
Public information shows that the compound covers nearly 100 hectares. This helped make Chengdu No. 4 in the country in terms of exhibition facilities by area, trailing only Beijing, Shanghai and Guangzhou.
ETG also owns Jiuzhai Paradise, a resort and conference center in the Jiuzhaigou nature reserve in northern Sichuan.
In December 2008, ETG started a massive project in downtown Chengdu. The project includes an exhibition center, shopping mall, hotel, office building and apartments. Sources said the land was acquired in the name of building public facilities, but all the completed portions are for commercial use.
Caixin also learned that ETG’s chief executive, Liu Yang, was also being investigated.
Two other Sichuan businessmen have come in for investigation by anti-corruption officials this year. The others were Wang Junlin, chairman of liquor maker Sichuan Langjiu Group, and Liu Han, chairman of Sichuan Jinlu Group Co., which makes chemicals.
*Thanks Mr. Henry Norman provided the pdf and docx file (link)