When a group of angry tenants arrived last Monday morning to present a petition to the city government, along with foreign journalists, the police were well prepared. They allowed the petition to be delivered but detained five reporters to prevent them doing interviews. This tells us two things - police bugging of telephone and fax lines is as efficient as ever, enabling them to know of the protest in advance, and that the project the tenants are angry about is no ordinary one. Sunshine Plaza is a complex of four red blocks with 600 apartments close to the Asian Games Village in north Beijing. Work began in 1993, with then vice-mayor Zhang Baifa going to Hong Kong and abroad to promote the project as a high-quality, prestigious investment. This high-level promotion achieved advance sale of 400 apartments, mostly by overseas Chinese, with payment of about US$60 million ahead of completion in August 1996. The apartments were not ready in time and the buyers were able to take possession only in 1997. They were appalled by what they found - poor quality interiors and materials, and water leaking down the walls. Despite this, about 100 buyers, including local Chinese, Hong Kong and Taiwan people and foreigners, decided to move in, while the others refused to take possession. About 40 went to court, demanding that the developer, Golden Horse Great Wall Property, pay back their deposits plus interest. The first was Ye Qing, a well-known fashion designer, who had paid 1.3 million yuan (about HK$1.2 million) or 60 per cent of the cost of his unit. Last December 1, the city's Second Intermediate Court ruled in his favour, ordering the freezing of several of Golden Horse accounts totalling US$50,000. But, when his lawyer, Wu Jianzhong, went to collect the money, he found the freeze order had been overturned, without written explanation, and he has not been able to collect the money. Other buyers followed suit but none has been successful. In the latest rulings earlier this month, the court found in favour of the developer, accepting his argument that factors outside his control, including poor weather, were responsible for the delay and ordering the tenants to pay the balance of the money. The buyers have appealed against the decision and hope for a higher court ruling at the earliest in May. This judgment was mistaken, Mr Wu said. Speaking of Ye Qing's case, he said it was unprecedented under mainland law that the court's orders could not be carried out and that the court handed back the developers assets that it had previously frozen. Behind the court's decision and police interference, some buyers see the dark hand of senior figures in the city government who, they say, are protecting the interests of business associates or want to hide a scandal of millions of dollars having disappeared. One argument against such an interpretation is the fact two government-controlled media, Beijing Television and Beijing Economic Daily have done hard-hitting stories about the case. The TV programme broadcast interviewers with several of the investors who had spent up to US$360,000 and expressed their indignation strongly. It attempted to interview the sales agent of the developer, but the agent 'had no intention or need' to respond to the reporter's questions. Beijing Economic Daily said Golden Horse owed 100 million yuan in construction costs and 78 million yuan in land payments and would go bankrupt if it lost the lawsuits. On this explanation, it is a case of a company over-extending itself during the 1992-93 property bubble, taking on more projects than it could complete - a result of mismanagement rather than fraud. Mr Wu said the case is sending just the wrong signal to investors abroad, at a time when Beijing wants to make real estate a major engine of growth. Only time and the workings of the Communist Party will tell us whether the case conceals a major fraud, linked perhaps to the disgraced former mayor Chen Xitong and his property deals, or whether it is a less exotic case of mismanagement and bad fortune.