China Princeling Accuses Developer Shui On of Mafia Tactics

In a rare public unveiling of conflict over real estate assets among China’s leading families, the son of a former General Secretary of China’s Communist Party accuses the management of SOCAM Development of using thugs to forcibly seize a real estate project belonging to his company, Jingda Real Estate Development.

In an episode that poses challenges for new Premier Li Keqiang’s drive to create a credible legal system, Hu Dehua, son of Hu Yaobang, contends that ”At least 200 thugs, armed with sticks, guns, chains and other tools of violence” forced their way through the gates of his company’s Lakeside Villas project in Beijing’s Shunyi District in August 2009 to forcibly seize control of the asset.

In a complaint that Mr Hu has prepared to send a member of the standing committee of China’s Politburo, he contends that 200 armed men invaded the compound, stole all the documentation of his company, Jingda Real Estate Development, and took over the project by force.

According to an original report in the Age, several witnesses related how thugs and security personnel arrived early on a Sunday morning in August 2009 to evict Jingda’s security guards and workers, formed a ”human wall” across the entrance and sealed off the walls of the compound with barbed wire and broken glass.

Witnesses said they recognised some leaders of the armed gang as being associated with SOCAM. Video recordings of the incident show dozens of men, some wearing uniforms wielding batons, clubs and handguns while police wait outside without attempting to intervene.

While it may be hard to believe that the son of one of China’s former top leaders could be robbed of a villa compound in broad daylight, Mr Hu contends that SOCAM was able to launch this raid because of its parent company, Shui On’s strong ties with senior level officials in the “Shanghai faction” of the government leadership.

The motive for the raid, according to Hu, was to enable SOCAM to purchase 133 villas in the project at a discounted rate. In any case, documents filed with the Hong Kong stock exchange show that SOCA sold 133 villas in the disputed compound in September 2010 for HK$944.9 million.

Hu apparently is ready to speak out publicly about the incident thanks to some recent power shifts at the top levels of China’s government

Last week a key supporter of Shui On in the government was replaced by one of Mr Hu’s childhood friends as the country’s fourth-ranked leader. Mr Hu’s complaint is addressed directly to his friend.

A SOCAM spokesperson categorically refuted all accusations in the complaint.