Vendors protest after developer breaks leases at Guangzhou mall

PUBLISHED : Thursday, 20 November, 2008, 12:00am
UPDATED : Thursday, 20 November, 2008, 12:00am

Dozens of angry retailers demonstrated outside Guangzhou's Tianhe district government building yesterday morning, urging officials to force one of the city's best-known property developers to compensate them for severing their leases on shops in a mall.

The protesters, operators of furniture and gardening supply stores in the mall, complained that the property owner, Meilin Jiye Group, was using fraudulent means to force them out of the complex.

With their faces covered by masks, the vendors, their employees and suppliers held up banners reading 'Harmonious society, just compensation' and shouted: 'The government should back us.'

'[Meilin] took premeditated action, and only the government can help us,' said Ma Juan , deputy manager of Guangzhou UGarden Investment.

Ms Ma said she had so far invested 6.69 million yuan (HK$7.6 million) in her shop, which opened in January, but was offered only about one-sixth of the outlay as compensation.

Protesters accused Meilin of 'laying traps' for about 60 vendors for more than six months.

In July and August, Meilin representatives informed most of the tenants that the mall was adopting a new business style and they could temporarily stop paying their rent. But the tenants began receiving letters from Meilin's lawyers in the middle of last month, saying the contracts had been automatically cancelled because the tenants had failed to pay their rent for August within 30 days.

According to the vendors, the letters said they had to move out immediately.

Ms Ma, whose company had signed a five-year contract with Meilin at the end of last year, said it was impossible for all tenants to owe back rent at the same time.

'We guess Meilin is facing financial problems, and they want to get rid of the 40,000-square-metre mall after they drive us away,' Ms Ma said, adding that Meilin was legally obliged to pay millions of yuan in compensation to the tenants if they broke the leases.

Ms Ma said that under pressure from Meilin, half the companies, which were small and had no written evidence against the developer, had taken the compensation offered and left, even though the money was a fraction of their investments.