"In-depth" The tallest building in Bama, Guangxi is unfinished: small developers in the county face the same problem
Eight years after its construction, the tallest building in Bama County, Guangxi is still abandoned.
This real estate development project, whose full name is "Bama Business Center", is second to none in the local area in terms of location and scale.
But in the past 8 years, this star project has not only been delayed in completion, but more and more people have become involved in it: the construction party is seeking payment for the project, the home buyers collectively demand the handover of the house, and the project developer Yang Guanglong He is still in the detention center because he was charged with "illegal absorption of public deposits".
Today, Bama’s housing prices have far exceeded those in surrounding counties, but the deadlock at the “Bama Business Center” has not yet been resolved.
Jiemian News found that it was a series of accidents that finally defeated this star project. There are both policy changes and sudden changes in credit trends, which are also common problems faced by many small developers in counties.
On December 7, 2020, Jiemian News reporter learned from Yang Guanglong’s defense lawyer that Yang Guanglong’s case of “illegal absorption of public deposits” has been sent back to the Bama County People’s Court for retrial.
Bama's largest business district
On Bama Shouxiang Avenue, the four gray high-rise buildings of the "Bama Business Center" are eye-catching and abrupt. Since the project was never completed, the fence has not yet been demolished.
"It should have been built long ago, but there has been no movement for so many years." A shop owner opposite the Bama Trade Center told Jiemian News.
Among the 10 "Hometowns of Longevity in the World" certified by the United Nations Institute on Aging, Bama Yao Autonomous County was among the first areas to advertise "health industry tourism".
The year-round warm and humid climate and negative oxygen ion content dozens of times higher than that of inland cities attract a large number of health enthusiasts every year.
There are also many real estate developers who are also interested in this "feng shui treasure land", and Yang Guanglong is one of them.
Since 2005, Yang Guanglong, the owner of Yizhou Jinlong Real Estate Development Co., Ltd. (hereinafter referred to as Yizhou Jinlong Company), has successively built the local "first commercial and residential community" in Bama. Showing the first elevator community.
"The houses are very popular and the funds are withdrawn quickly." Yang Guanglong's son Yang Qingcai recalled that the successful completion of the two projects made Yang Guanglong more confident in Bama's real estate projects.
In 2012, Yang Guanglong bought the Bama Business Center land in the center of the county for 85 million yuan. According to the plan, the project will have a maximum of 32 floors, including 700 residential units and 200 shops. When completed, it will not only be the tallest building in Bama, but will also become the largest business district in Bama.
“According to my father’s plan, after acquiring the land, he would use the remaining funds for construction while applying for a loan from the bank using the project as collateral. After receiving the pre-sale certificate, the funds would be recovered through the pre-sale. , continue construction until completion. If everything goes well, it can be completed and delivered in up to three years."
The credit adjustment triggers a butterfly effect
What Yang Guanglong did not expect was that this seemed to be foolproof. The project was delayed for three years before it officially started.
On January 13, 2012, the Bama County Land and Resources Bureau and Jinlong Company signed the "State-owned Construction Land Use Rights Transfer Contract", stipulating that the Land and Resources Bureau will deliver the clean land of the transferred parcel before May 30, 2012 To Jinlong Company, the land use is commercial and residential construction land.
However, the Bama County Land and Resources Bureau failed to completely transfer the land before entrusting the auction of the land, and the land delivery was overdue for 273 days.
"A lot of things have changed." Yang Qingcai said.
Dangerous signals came one after another, and the bank refused Yizhou Jinlong Company’s loan. "When we were acquiring the land, three banks in Bama came to inquire about our loan needs. But when we got all five certificates, the banks said that credit policies were tightened and they were unwilling to lend."
According to financial news reports, On June 20, 2012, the central bank raised the RMB deposit reserve ratio for banks by 0.5 percentage points, and the deposit reserve ratio for large and medium-sized financial institutions reached a high of 21.5%. This is an obvious signal that the scale of real estate credit is shrinking.
Due to the tightening of credit, it is becoming increasingly difficult for small and medium-sized enterprises to obtain financing, and many places have suspended the property mortgage business of private lending companies.
"Those two years were the most difficult time for small and medium-sized enterprises to obtain financing. Many of them could only rely on private loans to survive, and some companies died due to a broken capital chain." said Chen Qide, a researcher at the China Institute of Financial Research. A real estate research report by Guotai Junan showed that the funding gap of real estate companies reached 1.35 trillion yuan in 2012.
The construction was stranded many times
Bank credit was not available, so Yang Guanglong turned to private loans.
Although 62-year-old Yang Guanglong only has a high school education, he has been working hard in the construction industry for many years and has many business partners.
Around 2012, Yang Guanglong mortgaged his property to 47 friends for loans. "We still want to get the project off the ground, and we can withstand the temporary loss of several million in interest," Yang Qingcai said. The first-instance judgment showed that these creditors had previous dealings with Yang Guanglong. A former business partner, Lan Jun, said that he had known Yang Guanglong for more than ten years. In 2012, because Yang Guanglong said he was investing in the Bama Business Center project, the capital turnover Not open. After Lan Jun conducted an on-site inspection, he successively lent Yang Guanglong 13 million yuan.
But it was these private loans that later became the reason why Yang Guanglong was accused of "illegal absorption of public deposits."
After the Bama County Land and Resources Bureau delivered the land, the project was stuck on the "Construction Project Planning Permit". In June 2015, Yang Guanglong learned from the County Housing and Urban-Rural Development Bureau that the plan would be readjusted and the floor area ratio would be reduced from 8.0 to 6.5. The originally planned 32-story building could now only be built to 21 stories. "According to the new plan, our land transfer fee will be increased, and the number of commercial houses that can be pre-sold in the future will also be reduced." Yang Qingcai said.
Meng Shaoxing, director of the Bama County Housing and Urban-Rural Development Bureau, told Jiemian News that at that time it was the Guangxi Autonomous Region government that re-formulated the control planning plan for the project under construction in Bama. "It is not the county's decision."
In May 2015, when the Bama Business Center, which was in desperate need of funds, opened for pre-sale, it sold more than 80 million yuan in one go.
Yang Qingcai said that at that time, the funding gap of the entire project had exceeded 100 million, and there was still a large amount of project money that had not been paid, and the borrower's interest also had to be repaid.
In the end, only 40 million yuan of the 80 million yuan was used to pay for the project.
Long-term liabilities eventually overwhelmed Yizhou Jinlong Company. When the Bama Business Center was built to the 16th floor, Jinlong Company's capital chain broke again. Because Yang Guanglong was unable to pay the remaining 80 million yuan in project funds, the construction contractor Guangxi Construction Engineering Group Construction Engineering General Contracting Co., Ltd. (referred to as Construction Engineering General Contracting Company) ) stopped construction and applied to the court to seal the houses under construction in the Bama Business Center.
Subsequently, Yang Guanglong began to look for partners and jointly invested to complete the construction. But the embarrassing thing is that small real estate companies cannot afford so much funds, and large real estate developers look down on such projects and are unwilling to invest.
In 2016, after trying various methods, Yang Guanglong still could not avoid the complete shutdown of the Bama Business Center project.
After repeated unsuccessful attempts to communicate, Yang Guanglong sued the Bama County Land and Resources Bureau, requiring the Bama County Land and Resources Bureau to pay liquidated damages for overdue land delivery and return the land transfer fee for the reduction in building volume. In the end, the Hechi Intermediate People's Court ordered the Bama Land Bureau to pay compensation of more than 19.86 million yuan. But it was not until 2019, after the Bama Land Bureau lost the second instance of the lawsuit, that the money was officially paid.
"This is a common situation encountered by small developers in counties. Due to their poor ability to resist risks, they can easily fail without policy and financial support." Researcher at the China Institute of Financial Research Chen Qide said.
The "life-saving straw" became a fatal blow
Due to the delay in handing over the house and the payment of the project payment, the Bama Business Center has become the target of public criticism.
In 2018, the Bama County Government issued the "Notice on Legally Handling Issues Related to the Unfinished Real Estate of the "Bama Business Center"" and established a "Bama Business Center" real estate working group headed by the deputy county magistrate. , overall coordination and processing. The "Notice" also announced the initiation of bankruptcy proceedings for Yizhou Jinlong Company.
This means that the star project that Yang Guanglong has been working on for 6 years will end in failure.
At this time, Liao Tuanfang, a Nanning boss who claimed to have 80 million yuan in liquidity, appeared. Yang Guanglong regarded him as the last straw.
The two parties quickly signed an agreement, and Liao Tuanfang registered and established Guangxi Zanfan Investment Co., Ltd. (referred to as Guangxi Zanfan Company), which will be fully responsible for the continued construction of the Bama Business Center project. The two parties agreed that Guangxi Zanfan Company will be responsible for the continuation of the project and will receive a fixed investment return of 30 million yuan during the period. Other income from the project will belong to Yizhou Jinlong Company.
However, Guangxi Zanfan Company, with a registered capital of only 2 million yuan, faced the problem of insufficient funds more than two months after entering the company, and frequently changed construction units.
During this period, Guangxi Zanfan Company established a sales team to collect property deposits at prices ranging from 100,000 to 200,000. Of the 19.86 million yuan compensated by the Bama County Land and Resources Bureau, 7 million yuan was also allocated to the construction unit hired by Guangxi Zanfan Company. This made Yang Guanglong very dissatisfied, making it difficult for the two parties to cooperate, and the Bama Trade Center was completely paralyzed.
"Illegal absorption of public deposits"
The project was not completed and the pressure was increasing. "Every Spring Festival, a group of people come to the county to demand an explanation." Tian Hanlu, executive deputy county magistrate of Bama County and leader of the Bama Business Center project working group, told Jiemian News.
Tian Hanlu said that it was Yizhou Jinlong Company’s late non-cooperation that led to today’s deadlock. But when it came to the specific situation, Tian Hanlu refused to be interviewed.
On April 13, 2019, Yang Guanglong was criminally detained by the Bama County Public Security Bureau on suspicion of illegal storage of explosives. Deputy County Magistrate Tian Hanlu said in an interview with Beiqing Daily that as early as 2016, they discovered the problem of Yang Guanglong's private possession of explosives, but in order to promote the Bama Trade Center project, no in-depth investigation was conducted. “In April 2019, we arrested and detained Yang Guanglong and his other son Yang Qingzhong in accordance with the law. Our ultimate goal is to hope that he can cooperate with (project construction), hand over his official seal, conduct financial management, and perform relevant obligations. Agreement. ”
In March 2020, the Bama County Procuratorate prosecuted Yang Guanglong at the Bama County People’s Court for the crime of illegal storage of explosives and the additional crime of illegally absorbing public deposits.
The first-instance verdict showed that prosecutors accused Yang Guanglong of purchasing a nearby quarry for RMB 1.8 million to meet the construction needs of the "Bama Business Center" project. During the period, he moved the remaining unpaid electric detonators Stored from old warehouse.
In addition, Yang Guanglong arbitrarily used commercial houses and shops as collateral for the development of the Bama Center project, with monthly interest rates ranging from 3% to 5%, and disguisedly absorbed high-interest loans from unspecified people in the society. Funds are used for company project operations and repayment of high-interest loan principal and interest. The capital chain was broken due to high-interest loans, which led to the suspension of the project. The rights of relevant creditors could not be realized, and they then petitioned, which had a bad social impact. After identification, from January 2011 to December 2018, Mr. Yang Guanglong borrowed nearly 81.77 million yuan from 47 people.
According to Article 176 of the Criminal Law of the People's Republic of China and the People's Republic of China, the crime of illegally absorbing public deposits refers to the act of illegally absorbing public deposits in violation of national financial management regulations or absorbing public deposits in disguised form, disrupting financial order. .
On December 13, 2010, the Supreme People’s Court issued the Interpretation on Several Issues Concerning the Specific Application of Laws in the Trial of Criminal Cases of Illegal Fund-raising, which stipulates that acts constituting the crime of illegally absorbing deposits from the public must also be illegal. Sex, sociality, openness, inducement.
In court, one of the creditors, Meichuan, testified that when Yang Guanglong was handling business at the Bama Real Estate Management Office, “he once said in front of everyone that he wanted to borrow money to turn around and build the Bama Commercial Building. Center Project". The court of first instance held that Yang Guanglong mainly sought out people to borrow money one-on-one, and also promoted high-interest loans in public in offices of other units. Since it has a large number of borrowers and does not require confidentiality or take measures to restrict the dissemination of information, it should be deemed to be publicly publicized to the society.
He Bing, a professor at the School of Law of China University of Political Science and Law, said that merely verbally expressing the loan in other units is not enough to determine that it has been publicly publicized to the public, and only two of the 47 borrowers were through other institutions. The borrower introduced the lent funds, but it cannot be confirmed that Yang Guanglong intended to publicize it.
When determining "whether to accept deposits from unspecified objects," the court stated that although most of the fund-raising participants were Yang Guanglong's friends, Yang Guanglong did not limit the identity and number of participants. As long as he had money to borrow, It is ok, so it is deemed that the loan is not targeted at a specific object.
He Bing believes that lending is not a deterministic behavior. The court stated that it should “consider whether it limits the scope of fund-raising and whether it limits the identity and number of participants.” This actually requires that lending activities must have a clear plan, and requires individuals or companies to follow such a plan. Strictly enforce. But in fact, such requirements are completely inconsistent with the characteristics of private lending behavior. This definition method adopted by the Brazil County Court is neither realistic nor operational.
On July 21, 2020, the Bama County Court ruled that Yang Guanglong was not guilty of illegal storage of explosives; for violating national financial management laws and regulations, he absorbed a huge amount of funds from the public and promised to pay a certain amount of money within a certain period of time. He was sentenced to five years and six months in prison for repaying principal and interest within the period, disrupting financial order, and constituting the crime of illegally absorbing public deposits. The court ruled that nearly 81.77 million Yang Guanglong's illegal gains should be recovered and ordered to pay compensation to relevant fund-raising participants.
According to information provided by Yang Qingcai, before being detained, Yang Guanglong had paid a total of more than 100 million yuan in principal and interest, and more than 40 million yuan was still outstanding. "After my father entered the bank, it became increasingly difficult to borrow money, and he was rarely able to repay the money later," Yang Qingcai said.
At present, Yang Guanglong has appealed to the Hechi Intermediate People's Court, requesting that the first-instance judgment be revoked and he be found not guilty.
There are more and more non-suction cases
In 2019, a set of data released by the Supreme People's Court showed that from 2015 to 2018, there were 5,843 new illegal fund-raising criminal cases in courts across the country. pieces, 7990 pieces, 8480 pieces, and 9183 pieces, a year-on-year increase of 108.23%, 36.7%, 6.13%, and 8.29% respectively.
He Bing, a professor at the Law School of China University of Political Science and Law, believes that due to the economic downturn in recent years, many private enterprises have nowhere to borrow money and can only take the path of private lending, and a large number of lenders in private lending are through Obtaining funds through fund-raising, these factors have objectively led to an increase in non-intoxication convictions. However, if the judicial authorities do not accurately distinguish between non-suction and private lending, it will be detrimental to the development of private enterprises.
Chen Qide, a researcher at the China Institute of Financial Research who has long been concerned about the development of the county real estate economy, said that illegal fund-raising cases in the real estate field are quite common. The fundamental reason behind this is that small developers have insufficient own funds and narrow financing channels. Leverage economic methods are often used to find money while developing. Once risks are encountered, it can easily trigger a domino effect, eventually leading to project failure.
In 2015, his team conducted a questionnaire survey of small developers in 12 counties across the country and found that one-third of them encountered problems such as sudden policy changes and excessive credit thresholds during project development. .
Chen Qide believes that national financial institutions should continue to vigorously improve the financing environment for small and medium-sized enterprises. At the same time, local governments should also ensure the stability and consistency of policies in the development of real estate projects and serve small and medium-sized enterprises that are truly willing to do things. .
Meng Shaoxing, director of the Bama County Housing and Urban-Rural Development Bureau, told Jiemian News that all parties are responsible for the ups and downs of a high-quality project. "From the government's perspective, if we demolish first and then auction, it will not The problems related to delayed land delivery may have been solved now, so we have learned our lesson, and any land we list later will be guaranteed to be sold cleanly.”