A local Chinese corruption probe said to have precipitated the country’s first developer bond default last month has expanded to include almost 100 government officials and businessmen.
The figure at the center of the investigation -- Jiang Zunyu, an ex-district party chief in the southern Chinese city of Shenzhen -- is suspected of taking more than 250 million yuan ($40 million) in bribes, the provincial branch of the Communist Party’s anti-graft agency said on its official WeChat account Monday. Property developers paid the money to a consulting firm set up by Jiang’s wife, the agency said.
As many as 97 party cadres and businessmen are involved in the probe, including a Hong Kong property developer, according to the report released by the Guangdong branch of the Central Commission for Discipline Inspection. So far, the cases of 17 people have been forwarded to prosecutors for potential criminal charges, the agency said.
The same investigation led graft-busters last year to begin looking into Shenzhen-based developer Kaisa Group Holdings Ltd.’s links to Jiang, two people familiar with the matter told Bloomberg News in January. Kaisa was unable to pay $52 million in interest last month after some approvals were suspended for its projects in Shenzhen’s Longgang district, where Jiang had been party boss.
Jiang was placed under investigation in October and formally stripped of his post last month. His wife was not identified by name in the report.
Kaisa’s woes began last year after it issued a statement Oct. 17 denying rumors that Chairman Kwok Ying Shing was missing and unreachable. Kwok later resigned for “health reasons” only to return as chairman last month, as the company negotiates with investors on debt restructuring.
— With assistance by Aipeng Soo, and Keith Zhai