Troubled developer China Fortune Land says co-president has been detained due to suspected ‘violation of laws’
- Beijing-based China Fortune Land said it was recently informed by a local anti-corruption agency that Meng Jing has been detained
- The Ping An Insurance-backed developer began defaulting on loans in early 2021, a major casualty of Beijing’s ‘three red lines’ policy
China Fortune Land Development’s co-president Meng Jing has been detained by authorities due to suspected violation of laws, according to a filing by the troubled mainland developer to the Stock Exchange of Shanghai on Tuesday.
Beijing-based China Fortune Land said it was recently informed by a local anti-corruption agency – the supervisory commission of Chongyang County in Xianning City, central Hubei province – about the detention of Meng.
“The company already has proper arrangements to handle the duties of Meng Jing. The board of directors and management team will try its best to maintain all business operations of the company in an orderly manner,” the filing states.
China Fortune Land said the detention of Meng will not interrupt daily operations at the company. “The investigation is ongoing … The company will closely monitor its progress and will make any disclosures as needed,” the filing states, without elaborating on specific charges against Meng.
China Fortune Land, which focuses on developing industrial estates and urban projects, was among the first developers in the country to default on its debt amid a widening property slump that has sucked in peers such as China Evergrande Group, Modern Land (China) and Sunac China Holdings.
China Fortune Land began defaulting on loans in early 2021 and was seen as the first big casualty of Beijing’s “three red lines” policy introduced in August 2020 to rein in excessive leverage and hot money flows in the property sector.
Fortune Land unveiled a debt restructuring proposal in October 2021 to trim its 219 billion yuan (US$32.1 billion) of liabilities. In December 2022 it agreed to sell its interest in four projects to Hong Kong-listed China Resources Land, raising US$1.78 billion as part of ongoing debt reduction efforts.
Ping An Insurance (Group) is the largest shareholder in Fortune Land with a 25.2 per cent stake. In March 2022, the insurer reported a 29 per cent decline in net profit in 2021, citing a 43.2 billion yuan provision it had to make for its investments in Fortune Land.
Fortune Land owns a football club, which was previously coached by ex-Premier League player Li Tie, who was also put under investigation in November 2022 for “serious violations of the law”, according to a statement posted on the website of a provincial anti-corruption body in central China. The agency did not provide more details.
Chinese President Xi Jinping has launched sweeping corruption probes across many sectors since he came to power over a decade ago, including the government, security, education and entertainment sectors.
Separately, Chinese developer Seazen Holdings last Friday said it could not contact its co-president and board member Qu Dejun, and is unaware of his status, according to a company filing to the Shanghai Stock Exchange.
Additional reporting by Pearl Liu
