Shanghai police have detained a major highway and property development tycoon1 on suspicion of bank loan fraud involving 4.6 billion yuan , the Oriental Morning Post reported yesterday.
Liu Genshan, also known as Shanghai's King of the Road, first came under investigation2 in 2005, when corruption3 was uncovered in one of his highway projects in Zhejiang province. Authorities have not yet released details on how Liu might have defrauded4 the banks.
He was also accused in a 2005 letter to Hong Kong's Independent Commission Against Corruption to have moved 3 billion yuan from his highway investments overseas through illegal private banks. Consequently, two highway construction projects in Ningbo, Zhejiang province, have been suspended due to lack of funding.
An unnamed source close to the police bureau confirmed to China Daily that Liu is still under investigation but refused to elaborate.
But Caijing magazine quoted a senior official in Shanghai's jurisdiction5 system as saying a fresh round of political scandals related to the case could soon come to the fore6.
Since shifting from real estate to highway development in 1999, the 51-year-old invested in seven city-level highways totaling 900 km in length in Shanghai and Zhejiang province. The highways were Huqingping, Hujialiu, Tongsan, Nanhuan, Ningbo Ringroad, Beilungang and Yongjin.
The Shanghai native turned to entrepreneurship in Hong Kong, chairing Mexan International Group and Hong Kong-listed Mexan Holdings. He returned to Shanghai in 1991 to launch property investments.
In 1997, his company ranked 13th among Shanghai's TOP 100 property developers in terms of sales volume.
The Hurun Report ranked Liu as the country's 36th richest man for assets totaling 2.1 billion yuan in 2004. In 2007, he ranked 590th.
Much of the tycoon's success is alleged7 to have stemmed from his close relationships with government officials.
Liu is believed to have been a close friend of Zhang Rongkun, former chairman of Fuxi Investment now serving 19 years in prison for embezzling8 from Shanghai's social security fund.
And Liu has also been associated with Zhou Zhengyi, once Shanghai's richest man and president of Shanghai-based property firm Nongkai Development Group, who is now serving his second prison term for involvement in the social security scandal.
By 2006, Zhang had developed 700,000 sq m of property and owned an additional 100,000 sq m. Liu owned 667,000 sq m of land in Shanghai Yangshan Deepwater Port, Caijing reported.
Questions:
1. What is Liu Genshans nickname and why?
2. How much money is he accused of defrauding9 the banks?
3. Which other city did the Shanghai native do business in?
Answers:
1. His nickname is King of the Road because he shifted from property development to highway projects.
2. 4.6 billion yuan.
3. Hong Kong.
