Kunming's property market has been a major generator of wealth in the last decade, but a recent scam in which people were tricked into buying nonexistent homes underscores how corrupt some parts of the industry have become and how little thought some people are putting into their investments.
Kunming police have arrested Yang Qingrong (杨庆荣), chairman of Yunnan Junxin Investment Co (云南君信投资有限公司) and 15 other suspects for their involvement in a fake housing project in which 2,000 people and 40 companies were conned into investing 300 million yuan (US$45 million) in a bogus real estate development.
According to a Xinhua report citing Kunming police, Junxin went all-out with its marketing effort for its "Huaxi Binhu International Ecological City" scam in the first half of this year.
The company rented a five-star hotel lobby to serve as its showroom, inflated its registered capital, used floor plans downloaded from the internet and made 3D promotional videos.
On the sales front, Junxin offered also colluded with local real estate agents, offering them large kickbacks for each apartment sold.
In addition to the 16 arrests made in relation to the Junxin case, Kunming police froze over 180 million yuan in assets, but it is unclear whether the remaining 120 million yuan can be recovered.
Earlier this year Junxin had actually contacted local officials about a property development in Yongsheng Village, on Dianchi Lake's west side, but local officials said they had never reached an agreement with the company due to environmental concerns.
Local officials announced in March that no approval had been given to any real estate projects in the area of Yongsheng Village in question, but investors in search of a good deal looked the other way.
Buyers who raised their concerns about Junxin's lack of a preselling license were told that the application process for the license was almost complete, which was the reason for offering discounted rates.© Copyright 2005-2022 GoKunming.com all rights reserved. This material may not be republished, rewritten or redistributed without permission.