Officials in China’s Guizhou face corruption investigation weeks after launch of probe into arrest of businesswoman

The two officials have ties to state-run resort alleged to owe millions in back payments for building projects
Province is looking into detention of construction firm’s owner, accused of ‘picking quarrels and provoking trouble’ after refusing settlement offer

China’s Communist Party

Phoebe Zhang

Published: 7:00pm, 20 Mar 2024

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Two officials from southern China’s Guizhou province are being investigated for corruption weeks after the province started looking into the arrest of a businesswoman who tried to recoup millions in back payments for projects carried out under the duo’s watch.

Hou Junran, the deputy Communist Party secretary of the political and legal affairs committee of Shuicheng district in the city of Liupanshui, and Wang Erbin, Shuicheng’s former deputy party secretary, are under investigation for “severe violation of the law and party discipline”, the Liupanshui Commission for Discipline Inspection announced on Tuesday.

Both officials held positions at the Yeyuhai Mountainous Region Resort, which is owned by the Shuicheng district government.

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Starting in 2017, the resort invested close to 300 million yuan (US$41 million) to build a bike racing track, houses and museums. But by 2018, the projects were halted due to lack of funding, according to a 2021 report by state-owned China National Radio.

Businesswoman Ma Yijiayi’s construction company was contracted to build many of these amenities, but she said she was never paid for the projects. She later sued the resort subsidiary that oversaw the projects for non-payment and won, but she still never received the money.

According to a now-deleted report published in the China Business Journal last month, the local government allegedly owed Ma 220 million yuan but tried to settle the debt for 12 million – an offer the businesswoman refused.

In November, Ma was detained and accused of “picking quarrels and provoking trouble” – a controversial catch-all charge often used to prevent aggrieved parties from raising complaints to higher authorities, according to an investigation by China’s top court. She was arrested in January and remains in custody.

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Authorities did not say whether the investigations into Hou and Wang were directly related to Ma’s case, but they come just weeks after Guizhou prosecutors set up a special task force in late February to look into the businesswoman’s arrest.

It is the second time Wang has been investigated by party disciplinary authorities. In 2018, he was investigated, expelled from the party and demoted.

An article published by the Central Commission for Discipline Inspection in 2019 said Wang had often dined with businessmen. It said he had accepted cash and gift cards from them and sold a flat for half a million yuan above market price in exchange for granting favours to a real estate developer.

Wang previously served as director, party secretary and environment deputy bureau chief in Liupanshui. From November 2014 to May 2018, he acted as chairman of the Yeyuhai resort’s management committee, a state-owned body.

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From 2016 to 2020, media reports described Hou’s position as deputy director of the resort’s management committee.

The chairman of the resort’s management committee in 2021 said the government had wanted to provide employment in tourism and senior care, but its planning had been “ahead of its time”.

Liupanshui authorities said they had paid off nearly 90 per cent of the money they owe Ma, and that the entrepreneur was arrested for using GPS to illegally track and obtain citizens’ data.

Provincial prosecutors have not released any more updates on Ma’s case since setting up the task force in February to investigate her arrest.

Liupanshui, a small city of 3.6 million, has been fighting against poverty for years. It has been touted as a success under President Xi Jinping’s poverty alleviation campaign.