Shanghai Regime Bilks Investor of Large Condo Project

August 30, 2007 Updated: August 30, 2007

Hong Kong investor Sun Yanbiao began investing 280 million yuan (approximately US$33.82 million) into building a large condominium project in Shanghai 12 years ago. However, because of the problem of land ownership, he could not sell the units. The Shanghai regime has already ordered the demolition of the buildings, and Sun's investment will disappear in a blink of an eye.

Sun told Hong Kong's Apple Daily, “The Public Security Bureau arrested me on August 24. They warned me not to go to watch the demolition on August 27, otherwise they will detain me.”

Who Controls the Land?

Sun's project, Shanghai International Celebrity Square, was located in the Xuhui District—a central area of Shanghai. The project's area is 63,000 square meters (over 678,000 sq.ft.). The land was originally an industrial site for the state owned enterprise No.18 Shanghai Radio Electronic Manufacturer. In 1995, Sun signed a 20 years land lease contract with the manufacturer, who promised to apply for the conversion of the industrial land use permit to a business land use permit. But not long after Sun paid his money, the manufacturer declared bankruptcy. So Sun could only deal with the land ownership issue with the manufacturer's parent company, Shanghai General Electronics Group (SGEG).

In September 2001, SGEG transferred the land-use permit to Sun. But in the same year SGEG filed a suit against Sun to request the return of the land-use permit and also pay rent of 90 million yuan (US $10.87 million).

Forged Contract

Sun sued in court. During the proceedings, although Sun pointed out that the contract provided by SGEG was forged, the court still decided in favor of SGEG who was declared the rightful owner of the site.

Meanwhile, SGEG asked Sun not to appeal and claimed it would continue to cooperate with Sun regarding the project. The two parties signed a contract of cooperation again.

Local Regime's Collusion

In January 2007, a land developer under the local Xuhui District government claimed it had obtained the land-use permit, and later even mobilized the police to supervise the forced demolition and execute an order to demolish the completed buildings on Aug 27.

Sun believes the related developer and local government colluded to misappropriate his investment. He and a dozen relatives went to Shanghai International Celebrity Square to argue with the authorities on August 24. The Hong Kong Special Administrative Region Economic and Trade Office in Shanghai agreed to help and sent officials there to investigate the event after receiving Sun's request for assistance.

Sun Is Threatened with Detention

However, at 4:00 p.m., August 26, the local regime sent more than 100 police to the scene. They arrested Sun and some of his relatives and brought them to local police station. Other relatives were driven out of the building. Some of those arrested claimed they were brutally treated and even beaten up by the police. The police interrogated Sun until midnight. They requested he write a guarantee letter to promise that he would not go to the Square to stop the demolition of the building on August 27, otherwise the police would arrest him.

Sources revealed that a local government official told Sun his building would definitely be demolished. Regarding his compensation, he could only look to SGEG, but the official said, SGEG is a big group, “How much you can get, depends on your ability.”