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Property Developer Fined for Illegal Fundraising
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A real estate development company has been fined 1.82 million yuan (234,000 US dollars) for illegal fundraising that caused an angry crowd of home buyers to smash public facilities last weekend in southwest China's Chongqing Municipality.


Chongqing Environment Protection Construction Development Corporation Ltd., the developer of a planned downtown property project known as "Shangpin 16", was also told to refund more than 18 million yuan (2.3 million US dollars) it had raised from 2,700 home buyers, said an official with the local bureau of land resources and housing management.


In June, two months before the company got the government's go-ahead for the planned project, it collected 6,666 yuan (855 US dollars) of down payment from each of the potential buyers, promising them a preemptive right to choose apartments at a discounted price.


Yet the planned project had only 1,158 apartments for sale.


The 2,700 home buyers gathered at a stadium near the development project on Aug. 5 for a proposed lucky draw to decide who would have to give up the purchase plan.


But the event was poorly organized and the unlucky ones questioned its fairness. An angry crowd of several hundred people smashed public facilities at the stadium and later broke into the project's sales office to destroy more equipment.


The local bureau of land resources and housing management started an investigation immediately, and demanded all illegally raised funds to be repaid.


The event has triggered an overhaul of Chongqing's real estate market, and the bureau has demanded several other developers to repay illegally raised funds before Aug. 15, or to face fines.


(Xinhua News Agency August 10, 2007)

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