Corruption and the world’s biggest building: 50-year-old billionaire behind the biggest building in China and the world has vanished; “There are more investigations, and more arrests, to come”

Corruption and the world’s biggest building

The New Century Global Centre is the biggest building in the world; 16 Wembley stadiums could fit underneath its vast roof.

By Malcolm Moore, Chengdu

5:35PM BST 13 Sep 2013

But the behemoth in the central city of Chengdu which formally opened at the end of last month, has become for many China’slargest and most embarrassing monument to the allegations of corruption that have wormed through the Communist Party. The 50-year-old billionaire behind the project, Deng Hong, once one of China’s richest men, has vanished and is thought to be in police custody. “We don’t know where he is,” a spokesman for his company, Entertainment and Travel Group (ETG) said. In his wake, more than 50 government officials have been detained by a series of overlapping investigations that reach to the highest level of the party, according to a former editor of a state newspaper. “There are more investigations, and more arrests, to come,” the editor added.Another source with connections to the local government said: “Deng Hong had ties to almost every official in Sichuan.”

In Chengdu, the capital of the province, there is little outward sign of the investigations that have sliced through the local government.

The undulating silhouette of the New Century Global Centre is pictured on the side of the airport shuttle bus, with the slogan “Better quality, integrity, honesty,” written above.

Among the offerings inside is a shopping centre of four million square feet, a convention centre, a university campus, an Intercontinental hotel, a pirate ship, a skating rink, an Imax cinema and a 54,000 sq ft artificial beach, flanked by a 500ft LED screen that is roughly the same height as the Statue of Liberty and displays tropical sunsets to swimmers.

It is a marvel, even on the ever more ambitious scale of Chinese mega projects, and while no one knows how much it cost, the local government is rumoured to have spent as much as £5 billion on the project. “We are absolutely full at the weekend,” said one employee at the Lavazza coffee shop inside.

But on a weekday, the centre was quiet. A few tourists wandered its striped marble halls, two swimmers in the indoor sea seemed like ants from the stadium seating above. A long, golden escalator, inlaid with electric blue screens showing jellyfish, carried tourists from the ground floor to the fifth, where they could cross a nerve-shredding glass bridge above a central atrium.

Sources in Chengdu suggested that the building might soon be taken over by the government and that Mr Deng would be lucky to escape prison.

Most embarrassingly, the centre was built specifically to host the Global Fortune 500 Conference, a showpiece event much-loved by the Communist Party. But, given the potential for political humiliation, the conference was moved at the last minute to the Shangri-La Hotel. “The centre was supposed to open in March as an exhibition centre for government officials, but Beijing disapproved,” said one source in Chengdu.

Mr Deng joined the People’s Liberation Army as a teenager and fought in a border war with Vietnam. In 1985, he left and began a property business before emigrating to the United States in the early 1990s. But he returned to Chengdu when China began to accelerate its economy and persuaded the local government that he could draw both Chinese and foreign tourists and businessmen to the city. “I really don’t have anything to do with my fellow businessmen,” he told the Washington Post in 2002. “My business depends on the government.”

The newspaper noted that he owned 35 cars including a Ferrari, a Lamborghini, and several Mercedes-Benzes.

His connections were so close that he handed over a 30 per cent stake in his first convention centre, the Shawan Exhibition Centre in the north-west of the city, to the city government without charge in 2001. “His first show was a car event,” said a source in Chengdu, who asked not to be named because of the sensitivity of the investigations.

“The local government in Jiuzhaigou [a nature reserve] were so impressed they gave him a huge plot of land for free to build a resort.”

However, his ties to Li Chuncheng, the deputy party secretary of Sichuan province who has also been detained and expelled from the party, saw him questioned by anti-corruption officials.

Mr Li, 57, is thought to have served on ETG’s board when he was the deputy mayor of Chengdu. Local activists in Chengdu have compiled a long list of property developments from which they claim he may have profited.

“In fact, a lot of the officials in Chengdu and Sichuan now hate Li Chuncheng,” said one source.

Officials believe that when he was detained he made allegations against others, the source said.

“After he was officially expelled from the party, lots of people had celebratory parties.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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