Creditors put fugitive Guo Wengui’s dragon head-shaped Pangu Plaza on the auction block at a steep discount to recoup debt

20-Jul-2019 Intellasia | South China Morning Post | 6:02 AM Print This Post

An iconic office and hotel building in Beijing formerly controlled by the Chinese fugitive Guo Wengui will go on the auction block on August 19, as his creditors sell his forfeited assets to recoup debt.

Pangu Plaza Tower 5, a 39-storey building shaped like a dragon’s head next to the Bird’s Nest Olympic Stadium in Beijing, will open for bids for 24 hours from 10am on August 19 on Alibaba’s Taobao e-commerce site. The building, glimpses of which could be seen in Paramount Picture’s 2014 Transformers: Age of Extinction, carries a reserve price of 5.18 billion yuan (US$750 million), less than half the average price of office towers in the neighbourhood.

Creditors seized the property in 2014 from Beijing Zenith Holdings after Guo fled to the United States to evade the Chinese government’s corruption crackdown, which subsequently brought down Ma Jian, head of China’s counter-espionage operations and a Guo associate. Guo had amassed a fortune estimated at 18 billion yuan, according to the Hurun Report in 2016.

Proceeds from the auction will go toward repaying more than 3 billion yuan of debt owed by Zenith to the Bank of Shanghai and a Shanghai investor, both listed as applicants of the auction.

Designed by Taiwan architect CY Lee, the man behind the Taipei 101 Tower, Pangu’s layout claims to be imbued with elements of feng shui. Named after the creator of heaven and earth of Chinese mythology, the Pangu project features a row of five buildings aligned along a north-south axis, with the dragon’s head Tower 5, where the Pangu Seven Star hotel sits pointing south.

Atop each of the three towers that make up the dragon’s body, the developer had built four siheyuan, as Beijing’s traditional courtyard homes are called. Veronica Chou, daughter of the Hong Kong textile tycoon Silas Chou, owned one of the “siheyuan in the air”, according to her 2014 interview with Financial Times. Chou could not be reached to comment.

Tower 5 was valued at $5.3 billion in 2013, and should fetch at least $6 billion now, Guo said on July 16 in a video post on YouTube. That would be eight times the reserve price that the Chinese creditors are seeking in their auction.

IBM China is one of the offices located at Pangu, taking up residence on the 25th floor, with naming right to the tower. Valuers assessed Tower 5, with 139,356 square metres (1.5 million square feet) of gross floor area, at 6.88 billion yuan, according to JD.com. Taobao, the Alibaba e-commerce platform on which the auction will be held, valued it at 7.92 billion yuan. Alibaba Group Holding is the sole owner of South China Morning Post.

The average price of Grade A offices in the neighbourhood of the Bird’s Nest is 88,585 yuan per square foot, 53 per cent higher than the reserve price of Tower 5, according to Fang.com, a major real estate online portal.

This is not the first time auctioneers had tried to get money out of Pangu. An August 2018 auction of 49 residential units and 19 offices valued at a combined 8 billion yuan failed to find any buyer.

A second auction, with a 20 per cent discount across the entire portfolio, was scrapped in February for lack of interest.

This time around, putting the entire “dragon’s head” up for sale has garnered a lot of spectators, with 39,213 people registering to observe the online auction as of July 18. Still, no one has put down the 1 billion yuan deposit needed to participate in the auction.

https://sg.news.yahoo.com/creditors-put-fugitive-guo-wengui-042750132.html

 


Category: China

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