(Yicai Global) March 27 -- Chinese property and insurance conglomerate Baoneng Group was accused of making illegal land acquisitions, amid controversies over its daring equity investment in China Vanke Co. [SHE:000002], one of the leading real estate developers in China.
An article about a businessman in Shenzhen informing on Baoneng’s Chairman Yao Zhenhua went viral on social media sites last Saturday. A WeChat user whose identity was officially verified to be ‘Chen Gujia, chairman of Shen Zhen Hexinjin Industry Development Co.’ blew the whistle on Zhou Zhenke and Zhou Zhenhong (the actual controllers of Dasheng Times Cultural Investment Co. [SHA:600892]), Yao Zhenhua and his brother Yao Jianhui for illegal land purchase.
The whistleblower alleged that the coconspirators swindled his company out of its legally-earned property between 2001 and 2012, robbing him lands worth tens of billions of yuan in Shenzhen.
Chen claimed, a 150,000 square-meter parcel owned by Puhe Company, which Hexinji has a stake in, was put up for auction three times between 2003 and 2009, and Baoneng Group bought the land for CNY350 million (USD51 billion), which was only a small fraction of the estimated market value of over CNY10 billion.
Chen exposed the case in a press conference in January.
Baoneng has issued three statements denying the allegations, claiming that its acquisition of Puhe Company’s land and the acquisition price have been reviewed and approved by several competent authorities.
The first statement was issued on Jan. 13. The second one was issued on Jan. 15, after Chen publicized the information through the press. The third statement was released on Jan. 28 and was similar to the first one in content, with several documents and a judgment issued by a court added.