Sunday 13 September 2009

Hong Kong businessman gets partial payout after 10-year fight over hijacking of Shanxi firm


After a 10-year fight for compensation, a Hong Kong businessman who says he is owed millions after his company was hijacked by officials in Yuanqu county, Shanxi, has received less than a third of his investment back.

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Guanyu said...

Hong Kong businessman gets partial payout after 10-year fight over hijacking of Shanxi firm

Yau Chui-yan
13 September 2009

After a 10-year fight for compensation, a Hong Kong businessman who says he is owed millions after his company was hijacked by officials in Yuanqu county, Shanxi, has received less than a third of his investment back.

As part of the settlement, he has been warned he must not go back to Beijing to protest.

Wang Wenjin, 65, set up Grow Sight Industries in 1992, and won the sole right to develop a copper mine in Yuanqu. According to papers filed during the long legal battle, Wang’s investment was HK$12 million.

After the company had operated successfully for four years, the county government “compelled” him to set up a joint venture with it, “otherwise I would have been seen as a traitor to China”, he said.

But in September 1999, according to the legal documents, he was muscled out of the business completely. The county transferred the assets of the venture, worth more than 100 million yuan, and those of four state-owned enterprises to a private firm set up by county officials, the Yuanqu County Wulon Company. He received nothing from the deal.

Then began a long legal fight that has cost him millions, seen him petition officials at every level from the county to Beijing, and left him broke. During his battle he has asked for help from the Hong Kong government office in Beijing and Hong Kong deputies to the National People’s Congress. He tried to petition leaders, including President Hu Jintao and Premier Wen Jiabao, but was detained by police.

In 2004, he went to the China International Economic and Trade Arbitration Commission, which in May 2006 ruled in his favour.

It ordered the Yuanqu County Wulon Company wound up and said Wang’s firm had contributed 8 million yuan (HK$9 million) and was owed unspecified compensation.

This June, police in Yuncheng, Shanxi province, issued an arrest warrant for Wang, saying he had unpaid business debts - an allegation Wang denies.

He dared not venture back to the mainland until last month, when he crossed the border and returned without incident. He was later told that central authorities had ordered Yuncheng police to stay out of what was a civil dispute.

Then, last week, he suddenly received a compensation offer from officials at the Yuanqu County Wulon Company.

“I am owed 8 million yuan, but they [the company] kept on bargaining with me,” he said. “The compensation offer decreased from 4 million yuan to 2 million yuan. I finally accepted 3 million yuan”. Wang has received the money but is still waiting for the company to wind up and is hoping for more.

A representative from a group of Hong Kong businesspeople that deals with such issues on the mainland said Wang’s case was one of many.

Luk Wai-ping, spokeswoman for the Concern Group on Investment Rights and Interests of Hong Kong Businessmen, said: “It is just a short-term solution to achieve harmony before National Day. There are still lots of similar business disputes that have to be settled. Many Hong Kong businessmen are not compensated according to court orders.”

Guanyu said...

Although the group has failed several times to meet officials in Beijing to air grievances over investments on the mainland over the years, they are considering a protest there close to National Day.

Six Hong Kong businesspeople were expelled from Beijing when they arrived there on a protest mission last year.

There is a price to pay for Wang, who has frequently visited Beijing to protest outside Zhongnanhai, the Communist Party leaders’ enclave.

“I am told I cannot go to Beijing to protest anymore,” he said. He had planned to protest again in the capital on or before October 1, the National Day on which a huge celebratory event is planned for Tiananmen Square to mark the 60th anniversary of the founding of the People’s Republic.

Wang said Wulon Company officials had admitted that they had been ordered by the Shanxi provincial government to settle the dispute. “Shanxi province was facing pressure from the central authority as well,” he said.

He said the 3 million yuan payment had improved his life a little “but I am still not sure if they will really wind up the company as the commission ruled”.