Soho China CEO denies money laundering accusations

PUBLISHED : Friday, 08 February, 2013, 10:49am
UPDATED : Friday, 08 February, 2013, 12:03pm

Zhang Xin, chief executive of Soho China (0410.HK), the largest commercial developer in Beijing, said on her blog she loathed corruption and denied money-laundering accusations after a Shanxi official was found to have bought most of her 41 Beijing properties from Soho China.

Zhang also urged the Chinese government to grant the public access to property transaction records in order to fight corruption.

Gong Aiai, a former banker in China’s coal-rich Shanxi province, was arrested this week after she was accused of using double identities to buy properties worth one billion yuan (HK$1.24 billion) in Beijing. Chinese media later revealed Gong had bought most of the properties from Soho China. 

Soho shares plunged this week amid rumours accusing Zhang and Pan Shiyi, her husband and chairman of Soho, of working with Gong to turn a profit.

“I believe that honesty is the building block of all human virtues,” Zhang said in a statement. “This serves as the guiding philosphy for how I live my life, educate my children and manage Soho China.”

“The government should roll out a property transaction records information system,” she added. “This will ensure every transaction is public and everyone can monitor corruption.”

Zhang published this message after Soho China released an official statement last week denying allegations of any illegal conduct amid controversy over Gong's 41 properties.

Businessmen in Shanxi tended to buy in bulk from Soho China for stable returns from properties in central areas of the major cities, a report by Shanghai-based China Business News said on Friday. 

Pan had cultivated an excellent relationship with his Shanxi clients - who had contributed to 40 per cent of the company’s sales revenue at one point in 2006, the report said.