A senior executive of Fuzhou-based property developer Tahoe Group is said to have been detained since last week for reasons suspected to be linked to the earlier arrest of the chairman of Shenzhen-based China Create Capital, according to local Chinese media reports.
Forty-five year old Yu Zhisheng, who joined Shenzhen-listed Tahoe in April last year to head up the group’s Shenzhen and Guangzhou real estate business, has been “uncontactable” since April 8, reported Shanghai government-owned website Yicai.
Yu, formerly a senior official in the Shenzhen city government, worked with China Create Capital immediately after leaving the bureaucracy in 2017 and was cooperating closely with the now disgraced asset management firm’s boss Zhang Wei when it purchased a Hong Kong office building from Henderson Land in January of 2018 for HK$9.95 billion ($1.27 billion).
The apparent action against Yu, who joined Tahoe early this year, is the latest in a series of controversies linking Shenzhen government officials to alleged corruption cases.
Tahoe Said to Cooperate with Authorities
Tahoe said via a spokesperson that Yu has taken a holiday for personal reasons, adding that the company has already been in touch with the authorities to confirm that Yu’s disappearance was not related to his work with the developer. Tahoe did, however, indicate that it will assist with any investigation should it be requested by government bureaus.
Tahoe, which has been rapidly selling projects this year in an effort to meet its financial obligations, appointed Yu as its new deputy brand director this January, according to a company announcement at the time.
Shenzhen Officials in the News for the Wrong Reasons
Yu’s disappearance comes after some of his former colleagues have already been caught up in government investigations in the last several months. In September last year, He Fan, deputy chief of the Shenzhen Public Security Bureau in Futian district was prosecuted by the Shenzhen government on suspicion of corruption.
Then in October, disgraced former Shenzhen deputy party chief, Li Huanan, was placed under investigation by the Communist Party’s top graft buster. Li’s probe allegedly also brought down real estate billionaire Li Hua, who was the founder and chairman of Shenzhen-based Excellence Real Estate Group.
Both Li Hunan and He Fan have worked together with Yu, according to the Chinese media. During his career, Yu had held a number of senior positions in the Shenzhen government including with the People’s Procuratorate of China (equivalent to a prosecutor’s office), the education bureau and the cultural affairs bureau.
From November 2015 to late 2017, Yu was the deputy director of Shenzhen’s Futian district, where he also served as the secretary of the political and law committee as well as director of the social work committee.
A Gangster Capitalist with an Interest in Charity
After leaving his government positions and just before joining Tahoe, Yu worked briefly as executive director of the China Create Charity Foundation, a non-governmental group controlled by China Create Capital boss Zhang Wei.
Zhang, a former PLA officer turned entrepreneur who established China Create in 2004, was was arrested earlier this month along with 43 of his company executives on accusations of “gangster-style fundraising, illegal detention of clients and other crimes.”
The Shenzhen-based investment firm burst into the headlines early last year when it purchased a 22-storey office tower at 18 King Wah Road in North Point from Henderson in January 2018. As of March 19th, the group also owned stakes in at least 10 Hong Kong-listed companies valued at a combined HK$346.8 million ($44 million), according to annual reports and exchange filings reported by Bloomberg.
Under Yu’s direction, the China Create Charity Foundation organised annual awards for scientists and provided grants to incubate projects developed by these innovators while also promising to assist with fund raising.
No evidence has emerged so far to link Yu’s disappearance with either the investigations of other Shenzhen officials or with Zhang’s arrest.
Disappearance Adds to Tahoe Woes
The disappearance of its brand director comes after financially troubled Tahoe was forced to sell a series of assets since December as it faces debts equal to more than four times its equity.
During a single week in late March Tahoe sold three projects to Shimao Group as it raced to repay a RMB 3 billion bond.
An earlier report in the South China Morning Post cited sources familiar with the matter as indicating that Tahoe was attempting to sell off 12 projects which it had paid no less than RMB 40 billion to acquire over the past two years.