A businesswoman in one of China’s impoverished southwest provinces was arrested along with her legal team after trying to recoup millions in back payments from local authorities.
Background of Debt Collection
According to the China Business Journal, Ma Yijiayi, a businesswoman in China, has been attempting to recover project payments for eight years since 2016, when her two construction companies took on ten government projects. These include a resettlement project for poverty alleviation, a cultural museum, and a cycling track, a kindergarten, and a primary school, all in Liupanshui City, Guizhou Province. Shuicheng District authorities (a district under the administration of Liupanshui City) refused to pay and once proposed settling the 220 million yuan ($30.6 million) debt for 12 million yuan ($1.6 million), but Ms. Ma rejected this proposal.The relocation project is an important poverty alleviation project in impoverished areas funded by the Chinese Communist Party’s (CCP) central authority.
By Aug. 13, 2019, eight projects had been fully delivered and put into use, while two were temporarily suspended due to work delays. As Ms. Ma awaited payment of the remaining project funds from the Liupanshui authorities, she withdrew from the construction of the Wild Jade Sea project in 2020 and requested an audit settlement by submitting data.
In 2021, after Ms. Ma reported the situation to the Liupanshui municipal authorities and the Guizhou provincial authorities, both the Forest Company and the Wild Jade Sea Management Committee issued documents confirming the overdue payments to Ms. Ma’s two companies. They stated that the projects were not audited due to the fault of the contracting party.
China National Radio reported in 2021 that the local authorities responded by promising to repay the debt as soon as possible.
Although the Forest Company had drawn up a repayment plan and acknowledged that payment had not been made for three audited projects and that the remaining seven projects would actively raise funds, no progress was made in the end.
In 2022, lawsuits filed by Ms. Ma’s two companies against the Forest Company and the Wild Jade Sea Management Committee for unpaid project fees entered the execution phase. In August, during the follow-up execution process, lawyers found that the Forest Company’s assets had been transferred, raising suspicions of it becoming a shell company, while the Wild Jade Sea Management Committee had been deregistered.
Ms. Ma claimed a certain official of the Shuicheng District authorities had repeatedly lied to the superiors, claiming that the project fees had been settled, and did not register her company’s debt in the submitted materials.
In September 2022, representatives of the Shuicheng District authorities and the Shuicheng District Cultural Tourism Investment Group stated during negotiations that they did not recognize the amounts determined by the effective judgments and arbitration awards and that the District authorities would immediately revoke the arbitration award.
The Forest Company and the Wild Jade Sea Management Committee continued to refuse payment, citing the projects not being audited.
However, after the lawyers used the court’s investigation order to look into the bank statements and loan information, they found that the Forest Company had borrowed 400 million ($55 million) and 180 million yuan ($25 million) from two major banks, and these loans were transferred to a number of affiliated companies. The lawyers suspected that the company’s refusal to undergo auditing was related to loan fraud.
Ms. Ma said the accumulated debts made her unable to pay her employees, and her companies went bankrupt. With no income plus the pandemic, the employees had no money for their family’s medical treatment and their children’s education, and they lived in constant anxiety.
SOS Letter from Representing Lawyer
In December 2023, before Ms. Ma was arrested, her representing lawyer, Hou Zhitao, issued an SOS video.“When you see this information or video, I may have been sacrificed due to persecution by the Liupanshui political and legal system, or have committed suicide being unable to bear the insult, or illegally detained by the Liupanshui political and legal system. All these are possible. This is not alarmist talk because I, my team members, my client, and my cooperating lawyer for case execution (Tang Lin from Beijing Yingke Kunming Law Firm) are being persecuted by the Liupanshui political and legal system.”
After hiding for several days, Mr. Hou was arrested. On Nov. 20, 2023, Mr. Tang was arrested, and nine legal assistants were detained.
In late 2023, during the Guizhou Provincial High Court hearing, Ms. Ma was criminally detained by local public security on suspicion of “provocation and troublemaking.”
Many More Ma Yijiayi in China
What seems absurd to the public is not unique to Ms. Ma.Mr. Hu used to own a technology company in Shanghai, specializing in large central air conditioners for energy conservation, and held many patents. After industrialization in 2016, he purchased pipes from a company in Shandong Province. However, during the operation, he discovered that they were all counterfeit, resulting in millions of yuan in losses.
Since the manufacturer claimed no responsibility, Mr. Hu reported the matter to the Shandong provincial authorities. After sending an investigation team to Shanghai, the authorities informed Mr. Hu that it was normal for local businesses to commit fraud and that the losses could only be borne by him. They further warned him that if he went to Shandong again, he would be arrested on charges of “provocation and troublemaking.”
Unable to accept how he was treated, Mr. Hu consulted a friend working at the Shanghai Municipal Petition Bureau to find out if he would actually be arrested.
His friend advised him not to go to Shandong again, saying, “They will definitely arrest you because you have touched the interests of the government. If this enterprise is shut down, they will lose their tax revenue. Local governments need a large amount of tax revenue for development, and these tax revenue indicators are all responsibilities of the top leader. If you stir up this matter and expand it, they will sacrifice you to solve this case and even get you killed.”
Turning Debt Collection Into Criminal Offenses
Senior lawyer Wu Da in Guangdong Province, who specializes in economic cases, said that local debt is a huge black hole, and the practice of turning debt into criminal offenses has spread nationwide.The authorities have arrested many human rights lawyers who try to stop the illegal handling of public prosecution and judicial cases. Now, they have begun to arrest lawyers handling economic cases for debt collection, Mr. Wu told The Epoch Times on Feb. 28.
“The CCP’s rule of law is at a dead end, and only at this time can people clearly recognize it,” he said.
Ms. Ma obtained these project contracts during the tenure of Li Zaiyong, the former vice governor of Guizhou Province, who has fallen in disgrace.
Mr. Li took office as the top official of Liupanshui in November 2013 and left in January 2017. During the three years, he promoted 23 tourism projects and planted over a million mu (164,737 acres) of Rosa roxburghii (a flowering plant). Ms. Ma began undertaking ten government projects in Liupanshui in 2016.
By August 2019, Mr. Li had been promoted to vice governor of Guizhou Province and municipal party secretary of Guiyang, the province’s capital.
Expert: Poverty Alleviation Fund May Be Misappropriated
According to Wang He, a China expert and columnist for The Epoch Times, the projects undertaken by Ms. Ma included central authority-funded poverty alleviation projects, which are a fertile ground for corruption within the CCP.However, one of the biggest issues with such projects is collecting back payment, which usually requires self-financing to start. Therefore, although these projects may seem profitable, they actually entail significant risks.
Mr. Wang believes that the main problem behind Ms. Ma’s case may be the misappropriation of funds.
Local CCP authorities’ corruption is intertwined with their mafia-style operations. Liupanshui is an improverished area that relies mainly on central authority funding for its major fiscal activities. However, the more money the central authority allocates, the more it becomes a juicy target for corruption in the region, he told The Epoch Times.
“When the upper class is not straight, the lower class will be in disorder, and the middle class also collapses so that the entire CCP authorities at all levels dare to act recklessly without any discipline and stage such a terrible incident,” he said.
“The only way for the people to save themselves is to stay away from the CCP.”
Ms. Ma and her lawyers, who represented her in debt collection, are now under arrest. The case has been transferred to the Shuicheng District Procuratorate of Liupanshui City.
An investigation by the Chinese edition of The Epoch Times found that Zhou Xiaoyun, a former journalist at Southern Weekly who now focuses on economic crime defense, serves as Ms. Ma’s defense lawyer. The Epoch Times reached out to Mr. Zhou but did not receive a response by press time.
