Creditors sell dragon shaped Pangu office tower on Taobao for a steep discount to recover debt owed by fugitive Guo Wengui

21-Aug-2019 Intellasia | South China Morning Post | 6:02 AM Print This Post

An iconic Beijing office tower in the shape of a dragon’s head has been sold for a discount during an online auction, as bankers and creditors succeeded on their third attempt to dispose of the asset to recover some of the 3 billion yuan (US$425 million) owed by the fugitive Guo Wengui.

Pangu Plaza Tower 5, which houses IBM China’s office next to the Bird’s Nest Olympic Stadium in the Chinese capital, was sold for 5.187 billion yuan during a 24-hour auction on Taobao, the country’s largest e-commerce platform.

The buyer was Beijing YuCheng Zhiye, according to the auction confirmation document on Taobao’s auction site. According to Tianyancha, a business data search tool in China, it is a Beijing-based property development and management company.

The building, seized from Guo in 2014 after he fled China for the United States to escape a corruption investigation, was put on the auction block for a starting bid of 5.182 billion yuan and valued by Taobao at 7.92 billion, about half the average price of comparable Grade A office blocks in the neighbourhood.

The sale of Tower 5 is a coup for Bank of Shanghai, which is leading a group of creditors seeking to recover the debt owed by Guo, who remains at large in the US even with an Interpol red notice out for his arrest.

The auction on Taobao, operated by South China Morning Post’s owner Alibaba Group Holding, was a highly anticipated affair, with 144,403 people registering to follow the proceedings. Yet only two people put down the minimum 1 billion yuan deposit required to take part in bidding.

The two bidders made their offers in the last 20 minutes before the 24-hour auction closed. The winning bid was only 5 million yuan higher than the reserve price.

The Pangu project, designed by Taiwanese architect CY Lee, features a row of five buildings aligned along a north-south axis next to the Bird’s Nest stadium. Plaza 5 the dragon’s head, which can be glimpsed in Paramount Picture’s 2014 Transformers: Age of Extinction faces south, with four office towers to its north making up the body.

On the roof of each of the next three towers, the developer had built four siheyuan, as Beijing’s traditional courtyard houses 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 said she had not been to Beijing for years, in a statement to the Post, declining to comment.

Business at Pangu Seven Star hotel in the last tower of the row was sparse during a recent visit. Standard rooms at the self-proclaimed luxury hotel, decorated with teak, marble and Chinoiserie paintings, start at 2,190 yuan, while a cup of fresh brewed coffee costs 70 yuan at its deserted lounge.

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. The tower has 139,356 square metres (1.5 million square feet) of gross floor area.

Bank of Shanghai had tried at least twice to sell Pangu. An August 2018 auction of 49 residential units and 19 offices valued at a combined 8 billion yuan failed to find any buyer, while a second auction, with a 20 per cent discount across the entire portfolio, was scrapped in February for lack of interest.

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.

Creditors seized the property in 2014 from Beijing Zenith Holdings after Guo fled to the US to evade the government’s corruption crackdown, which subsequently brought down Ma Jian, head of China’s counter-espionage operations and a Guo associate.

The Pangu project was previously known as the Morgan Centre, developed by Beijing Capital Land. The project was taken over by Guo after Beijing Capital’s former chair Liu Xiaoguang was befallen by a sex scandal.

https://sg.news.yahoo.com/dragon-head-building-beijing-once-022409935.html

 


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