HK logistics firm faces payout delay

PUBLISHED : Wednesday, 12 July, 2006, 12:00am
UPDATED : Wednesday, 12 July, 2006, 12:00am

Authorities to appeal against Huizhou court's ruling

A Hong Kong-owned logistics centre in Huizhou, Guangdong, will have to wait to collect a multimillion yuan court-ordered payout, with confirmation yesterday that authorities plan to appeal against the decision.

The Huizhou Intermediate People's Court last month ordered Huidong county's transport bureau to pay more than 13.7 million yuan to the Yuedong Freight Logistics Centre, owned by Hong Kong resident Lai Kun-yu.

The court found the bureau had charged the centre 2.6 million yuan a year in illegal 'paid service fees' between November 2000 and April this year. The bureau told the logistics firm the money had to be shared with local business administration, taxation and public security authorities, but was unable to account for the charges.

Yuedong asked for a 15.6 million yuan payout but the court granted 13.7 million yuan.

A bureau official yesterday denied the 'paid service' charges amounted to corruption and said the bureau would appeal to the Guangdong Higher People's Court.

'We charged the money as administrative fees for local logistics companies to use public roads. It's not corruption,' the official said. 'We don't accept the ruling. We will appeal soon.' She refused to give further details.

Mr Lai was unavailable for comment yesterday, but a spokeswoman at the centre said the bureau's decision to appeal was not unexpected.

The spokeswoman said the bureau may not have enough funds to make the payout and the centre's owners simply wanted a fair judgment and the opportunity to recoup their investment in the future.

The court said the bureau, which could impose charges relating only to the transport of goods, exceeded its authority by charging logistics companies for storage and for organising deliveries.

The court said the bureau had to repay all service charges it collected from dozens of transport companies that used the services provided by the logistics centre, and return the money to Yuedong.

Mr Lai told the court he had invested more than 30 million yuan in the logistics project but generated only a small income from rent and parking fees because the bureau took most of the centre's income.

Local media described the decision as the region's biggest case against officials, but it is not the first major case of a person suing a government body in Guangdong for compensation.

In June 2003, the Shenzhen Municipal Bureau of Urban Planning and Land Resources was ordered to pay 8.7 million yuan to the Shenzhen Nonferrous Metal Finance Company after granting property rights for the same land and buildings to two different companies.

It was the biggest state administrative compensation case on the mainland, drawing unprecedented attention and taking more than six years to resolve.