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March 2, 2010

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Collapsed-building executives face court over web of deceit

TWO executives of the developer of the collapsed building in Shanghai's Lotus Riverside residential complex went on trial in the city yesterday.

Que Jingde, 52, former board chairman of Shanghai Meidu Real Estate Developer Co Ltd, was charged with mishandling more than 42 million yuan (US$6.15 million) in state-owned assets with Zhang Zhiqin, 51, one of his former deputies.

Zhang was accused of being directly responsible for the collapse by giving incorrect orders.

He also allegedly embezzled 440 million yuan of company capital to buy financial products for private profit.

The hearing at Shanghai No. 1 Intermediate People's Court is scheduled to last two days.

Que admitted part of prosecutors' accusations but denied the valuation figure, while Zhang pleaded guilty to all charges.

Que was once director of the Meilong Land Acquisition Service Institute in Minhang District where Zhang was an employee. Que was appointed board chairman of Meidu, a collective company the institute established, in December 1995, with Zhang as deputy manager.

From September 2000 to April 2001, the duo allegedly hid part of Meidu's assets during the company's reform into a private entity and turned more than 42 million yuan worth of public assets into holdings free of charge.

The defendants allegedly lied to the property evaluation agency that Meidu only owned half of the 23,000-square-meter Lumei apartments and made the appraisal value of the residences 20 million yuan lower than market value.

In another project, Guimei Villas, the defendants allegedly excluded two residences valued at 2.36 million from Meidu's portfolio.

They also pruned the appraisal value of the 40,000- sqm Gumei plot by more than 17 million yuan, according to prosecutors.

The reform of Meidu was completed in April 2001, when Zhang became board chairman and owned 64 percent of its shares.

Que was a fellow board member and held 15 percent of the shares.

Zhang was also charged with being responsible for a serious accident.

He appointed an unlicensed builder to dig the underground garage of Lotus Riverside, gave wrong orders about procedures and failed to monitor the work, prosecutors alleged.

The building toppled on June 27, 2009, killing a worker and causing direct economic losses of 19.46 million yuan.

Six other people responsible for the collapse were jailed for three to five years on February 11 by Minhang District People's Court and three of them have appealed.

Zhang admitted he was irresponsible in management at yesterday's hearing and said he thought the builder was qualified.

From March 2009 to June 2009, Zhang allegedly embezzled 440 million yuan of the sales money fromthe Lotus Riverside project for his own use.


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