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Unfinished project pays off creditors GUANGZHOU: Guangzhou Intermediate People's Court yesterday delivered 41.8 million yuan (US$5 million) to 105 creditors of Jinjian Commercial Plaza, an unfinished building since 1998. It was the first such case heard by a Guangzhou court so far. "It indicates the start of using legal means to help settle the city's knotty problems of unfinished buildings," according to Chen Xianliang, an official from Guangzhou Intermediate People's Court. He said the court expected to handle more cases involving unfinished real estate projects in the southern metropolis. In previous years, most of the problems relating to unfinished buildings were settled between local government departments and organizations. The Guangzhou Municipal Administration of Housing said the city has more than 125 unfinished buildings, with a total floor space of more than 515,000 square metres. Construction of most of the unfinished projects began in the 1990s, then a lack of cash forced project owners to abandon the buildings before completion. Located in Baiyun Road, one of the city's prime destinations, Jinjian Commercial Plaza was designed to be 29 storeys tall, with a total construction floor space of 31,670 square metres. It was to have apartments, offices, shopping centres, entertainment facilities and parking spots. But construction, begun in the early 1990s, ceased when just seven floors had been completed in 1998, because of a lack of funds. The owner of the project, Guangzhou Jinjian Company, was later found to have debts of more than 500 million yuan (US$60 million). The operation licence of the company was scrapped in 2001. Guangzhou Intermediate People's Court sealed up the unfinished plaza in April 1998 after creditors jointly filed a lawsuit against the project developer and asked for the return of their cash. The project was auctioned off for some 80 million yuan (about US$10 million) last year. Most of the creditors are Hong Kong residents who invested in the city's property market in the early 1990s. They purchased the property for more than 10,000 yuan (US$1,200) per square metre. Most of them had paid more than 50 per cent of the total price. Jinjian Commercial Plaza has a new name, Baiyun Plaza, given by its new owner Guangdong Hongda Group, one of the major creditors of the project. (China Daily 07/01/2005 page3)
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