The corruption scandal surrounding Masinrui, a former member of the Chinese Communist Party's Politburo, has revealed connections to major real estate companies such as Hengda and Wanka. According to a report by Chinese economic media outlet Caixin, Masinrui's family leveraged political power to secure urban redevelopment rights in Guangdong province, which they then sold to large real estate developers for substantial profits.
The report indicates that Wang Zhanjiang, a real estate entrepreneur from Jilin province, and Hu Donghai, the former chairman of a real estate subsidiary under the state-owned China National Chemical Corporation, acted as proxy agents for the Masinrui family in urban redevelopment projects. Masinrui's brother, Masinquan, played a key role as a behind-the-scenes broker.
Wang Zhanjiang established a company called Mars Investment Co., Ltd. in Shenzhen in 2016 and formed a joint venture with China National Chemical Corporation's real estate arm, appointing Hu Donghai as the nominal chairman. Using the state-owned enterprise's name, they secured over ten urban redevelopment rights in Shenzhen.
Urban redevelopment rights are a crucial development authority granted by local governments in China, and acquiring them can lead to significant profits when sold to developers. The Masinrui family sold these rights to major real estate firms, including Hengda and Wanka, reaping enormous financial gains. Two of the rights sold to Hengda alone were valued at approximately 10 billion yuan (about $2.2 billion).
Mars Investment was once a strategic investor in Hengda. However, just before Hengda's liquidity crisis intensified in June 2021, it sold its 1.6% stake in Hengda for about 5 billion yuan to a Wanka subsidiary, withdrawing from the investment. Following Hengda's collapse, the related investment losses were transferred to Wanka, contributing to a record loss of approximately 88.6 billion yuan for Wanka last year, according to Caixin.
The family corruption linked to Masinrui began to surface after his downfall. In May of this year, Hu Donghai came under investigation by authorities, revealing a structure of collusion between real estate rights transactions and political power. Caixin reported that the Hu Donghai case became a key piece of evidence supporting allegations of economic crimes against Masinrui.
Masinrui, a prominent technocrat who played a significant role in China's technological advancement, served as the deputy secretary of Guangdong province, the party secretary of Shenzhen, and the governor of Guangdong from 2013 to 2021. He was promoted to party secretary of the Xinjiang Uygur Autonomous Region at the end of 2021.
However, he was dismissed from his position as party secretary of Xinjiang in July of last year and has since remained out of the public eye. On July 14, the Central Commission for Discipline Inspection of the Communist Party of China expelled him from the party and public office for serious violations of discipline and law.
Chinese authorities have stated that Masinrui accepted bribes and gifts, assisted family members in purchasing properties below market value, and engaged in corrupt activities involving power, money, and sex. They also announced that he committed organized family corruption by allowing relatives to reap substantial profits.
* This article has been translated by AI.
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