China Vanke Assists Top Anti-Graft Body in Probe of Claims That Subsidiary Arranged Junkets

(Beijing) — China Vanke Co. says it is cooperating with anti-graft investigators after a documentary reported that one of its subsidiaries had arranged and paid for an overseas vacation for government officials.

In the third episode of an anti-corruption series airing on state-run China Central Television (CCTV) on Wednesday, the Central Commission for Discipline Inspection (CCDI), the country's anti-graft body, said five officials from Qingdao, Shandong province, went on a paid trip to the U.S. and Brazil that was arranged by a local real estate company in 2014.

A document bearing the name of Vanke Holdings (USA) LLC appears in the documentary "Always On the Road." Photo: CCTV

While the documentary, Always On the Road, did not mention the company by name, it showed documents bearing Vanke's name.

The Shenzhen-based homebuilder responded in a statement on Thursday that it had instructed its subsidiary to cooperate with investigators.

Wang Haitao, the former vice party chief at Qingdao Daily who was ousted from his post last year, said on the program that "to maintain good relationships," he would order the newspaper not to expose troubled local companies if they came to him for help.

It's not clear what Wang was helping Vanke's Qingdao subsidiary conceal, but in return, the company arranged the overseas trip for Wang and four other officials.

However, Gao Shengjie, an official at CCDI's Qingdao office, said on the show that "it was impossible for (Wang) to get approval to travel overseas on trips paid for by companies" due to President Xi Jinping's corruption crackdown and austerity drive.

To avoid scrutiny, the Qingdao subsidiary asked Vanke Holdings (USA) LLC, the homebuilder's American operation, to send an invitation and a travel agency to forge an itinerary that showed Wang would visit some of Vanke's projects in the U.S.

But in reality, Wang and his party went on a nine-day vacation trip to the U.S. and Brazil. In Brazil alone, the group spent 600,000 yuan ($89,000), which included tickets to a World Cup semifinal.

All expenses were paid for by the property developer, Gao said.

"The company will learn a lesson from this experience, improve management of subsidiaries and prevent similar situations from happening," Vanke said in the statement.

Wang was expelled from the Communist Party and fired from his position at Qingdao Daily in 2015 due to corruption charges.

CCTV aired the first episode in the eight-part series in a prime time slot at 8 p.m. on Monday, a week before the ruling Communist Party's Central Committee is to convene for a key session. More than a dozen senior Communist Party officials indicted for corruption, including Bai Enpei, a former party secretary for the southwestern province of Yunnan, appeared on the program, where they recounted details of their crimes.

Contact Chen Na (nachen@caixin.com); editor Kerry Nelson (kerry@caixin.com)