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Lawsuit Alleges Corruption in Shanghai Redevelopment

May 30, 2003

For Immediate Release

Displaced residents of a redevelopment project in Shanghai have commenced a lawsuit alleging collusion between the developer and government officials. Sources told Human Rights in China (HRIC) that residents waiting outside of the courtroom were kept under close surveillance by a large number of police officers.

On May 28, 2003 the Jing’an District People’s Court in Shanghai began hearing a lawsuit by six homeowners representing 2,159 original residents of a property in West Beijing Road. The plaintiffs claim that the Jing’an District Property Development Bureau, under the instructions of the district government, improperly allowed a company controlled by a wealthy businessman, Zhou Zhengyi, to redevelop the 43,429 square meter property without paying a land lease with an estimated value of 300 million yuan.

According to Shanghai’s regulations, if the redeveloper of a property wants to avoid paying a land lease to the government he has to provide residential units in the newly developed property for all of the property’s original residents. But the plaintiffs allege that Zhou Zhengyi, with the collusion of certain local officials, moved all 2,159 original residents to a fringe district with very poor transportation and communication links, and still paid nothing for a 70-year lease on the property. In exchange, it is alleged, Zhou Zhengyi donated 20 million yuan to the Shanghai municipal government for use in fighting the SARS epidemic.

HRIC’s sources said that more than one hundred people packed the courtroom on May 28 – among them more than 40 plainclothes police officers reportedly carrying hidden microphones and cameras. More than 100 other people were denied admittance, and waited outside of the court under the close surveillance of more than 150 police officers. A number of protesters held banners and shouted slogans. Among the protesters were a number of individuals who have previously tried to petition Beijing over their discontent with the urban redevelopment program in Shanghai.

The displaced residents have increasingly disregarded the government’s attempts to suppress large public gatherings on the pretext of preventing the spread of the SARS epidemic. According to HRIC’s sources, the householders are becoming desperate as the government shows no inclination to address their dissatisfaction with the terms of their removal from their former homes. One of the plaintiffs, Shen Junsheng, is being assisted by his daughter, Shen Ting (Sam Ting), who is a Hong Kong resident. The other plaintiffs are Ma Kangyi, Zhou Daye, Wei Qin, Ding Jundi and Zhang Yulan.

Apart from their lawsuit, the residents have written an open letter to President Hu Jintao and State Council Premier Wen Jiabao (appended in full to the Chinese press release). The residents call for the central government to pursue legal remedies against Zhou Zhengyi and the Shanghai officials allegedly in collusion with him. The residents claim that Zhou Zhengyi was a close confederate of Huang Ju, a member of the Standing Committee of the Communist Party Politburo, when Huang was mayor of Shanghai.

Zhou Zhengyi (also known as Chau Ching-ngai), moved to Hong Kong in 1997 and is known there as the “Shanghai Tycoon.” Aged in his early 40s, Zhou controls Shanghai Land Holdings Ltd., a Bermuda-registered company listed on the stock exchanges of Shanghai and Hong Kong, and was named as one of China’s 100 richest people by Forbes Magazine in 2001.

“HRIC has for the past few months expressed strong concern about the situation of residents displaced by Shanghai’s redevelopment projects,” said HRIC president Liu Qing. “This trial will be an important test of whether China’s legal system can genuinely protect the interests of displaced homeowners over and against those of the rich and powerful.”

For more information, contact:
Stacy Mosher 212-268-9074 (English)
Liu Qing 212-239-4495 (Chinese)

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