An executive of Chinese conglomerate Dalian Wanda bribed a local official eight years ago to push through a deal that helped transform the company into a private-held, joint-stock operation free of government ownership, a court in northeastern China heard.
As bribes go, 300,000 yuan is considered small and Jin Cheng, a former municipal official in Dalian, Liaoning, is low-ranking. But the case sheds light on the early days of Wanda before it became the multinational property and entertainment giant it is today.
The details of the bribe surfaced in the trial earlier this year of Jin Cheng, the former Communist Party chief of Xigang district in Dalian, the company’s home base.
Jin was eventually found guilty and sentenced to 13 year’s jail for taking roughly 17 million yuan (HK$19.8 million) and US$550,000 in bribes from a range of sources.
According to court documents of the trial in the Benxi Intermediate People’s Court, Jin took the money in two batches – 100,000 yuan in 2008 and the rest a year later.
The bribes were given to him by a Wanda manager identified only by his surname “Leng” for help with the “corporate restructure and business operations” of Dalian Wanda Real Estate and Dalian Wanda Real Estate General, predecessors of Wanda Group, according to the document.
That restructure involved the district offloading its stake in Dalian Wanda Group to allow the company to become a privately held, joint-stock operation, free of government ownership.
Jin, as the district’s chief, chaired a series of government meetings between August 2004 and September 2009 to pave the way for the corporate transformation, including one in September 2007, in which the Xigang district government issued a directive legalising all deals regarding the 70 million state-owned shares in Wanda.
According to the court document, Leng then told a Wanda financial official surnamed Han to take cash from the corporate account and deposit the funds into bank cards.
Han testified that the bank cards were for Leng to give to Jin, who later confessed to accepting the cards.
The document did not accuse Wanda Group as a company of any wrongdoing and did not say whether Leng or Han were punished. Wanda Group did not reply to a request for comment.
Property development is at the heart of state capitalism in mainland China but Wang Jianlin, China’s richest man and Wanda’s founder, has repeatedly said that the US$100 billion business did not pay bribes.
He has often referred to “staying close to the government and being distant from politics” to describe Wanda’s dealings with the authorities. He is also on record as having worked as a senior official for the Xigang district government before launching Wanda.
The company said in 2012 that it had systems in place since the late 1990s to guard against bribe payments.
“The rapid development of Wanda’s business is not the result of connections or relations but our business model and competitive advantages,” it said.
The case emerged as Dalian Wanda Commercial Properties, an arm of Wanda Group, was trying to list on the A-share market after delisting in Hong Kong in August.
Wanda has made headlines with its aggressive overseas acquisitions and Wang’s ambitions. In Hollywood, Wanda has acquired AMC Entertainment Holdings and Legendary Entertainment and is in talks to buy Dick Clark Productions.
In London, Wanda has bought land near the new US embassy to develop two towers, one of which will be central London’s tallest residential building. At home, Wang is trying to creating its own theme parks to rival Disney’s offerings