InterContinental Hotels Group China partner arrested on fraud charges

Wednesday, 13 November 2013

Owner of proposed Lhasa InterContinental hotel in jail

Following speculation lasting several months, a report in Beijing News appears to confirm that Deng Hong, the billionaire chairman of Exhibition & Travel Group (ETG), is in jail in China facing a series of charges relating to his business dealings.

ETG is building and will own the InterContinental Resort Lhasa Paradise in Tibet, which will be managed by InterContinental Hotels Group (IHG) (1) under the InterContinental brand.

IHG has partnered with ETG since 2006, and runs a number of its hotels in China, including the InterContinental hotel in the ETG-owned New Century Global Center, reportedly the largest building in the world (2).
 
According to the report dated 7 November (3), an official from Sichuan Provincial People's Security System told Beijing News that Deng Hong is being held in Xianan district detention centre in Xianning City, Hubei Province, charged with three separate offences: illegally acquiring and selling land; invoice forgery and tax evasion; and engaging in fraudulent loan schemes.
 
Deng Hong's last public appearance was on 19 February 2013 at a meeting with a Shanghai official in Chengdu, Sichuan, where ETG is based.

Previous speculation has linked him to corruption investigations surrounding Li Chunchen, a senior official in Chengdu (4). Yesterday’s report is the first confirmation of his arrest.
 
IHG plans to open the 1,100 room Lhasa hotel in 2014.

Tibet campaign groups maintain that the company’s presence and its decision to name the hotel the ‘Lhasa Paradise’ is a propaganda gift to the Chinese regime responsible for human rights abuses throughout Tibet and for severe repression, surveillance and denial of human rights in Lhasa in particular.

UK-based IHG has refused to answer campaigners’ questions about its discussions with authorities in Tibet, how it has assessed the impact of the hotel on Lhasa and the possible use of the hotel as a venue for Chinese officials to discuss further repression of Tibet.

An ETG-owned InterContinental in Chengdu reportedly has ‘special floors’ for officials (5).
 
IHG has also declined to answer campaigners’ questions regarding Deng Hong and its own anti-corruption policies.
 
Last week, more than 20 InterContinental hotels around the world were targeted by Tibet campaigners protesting against the company’s plans in Lhasa (6).
 
Deng was listed at no 339 on Forbes’ list of the richest people in China in 2008, with an estimated worth at that point of more than $200m (7).

More commonly described recently as a billionaire, the former PLA soldier’s business has depended on relations with the government.

A source in Sichuan told the Daily Telegraph that Mr Deng “had ties to almost every official in Sichuan” (4). According to ETG’s own website, Deng was honoured with a “Most Influential Person in Sichuan Province” award in 2008 and was named “Sichuan Personality of the Year” in 2009 (8).
 
Free Tibet director Eleanor Byrne-Rosengren said:
 
“InterContinental’s Tibetan adventure is quickly becoming a disaster.

The hotel is years behind schedule, it is the subject of an intense and growing boycott campaign by Tibet supporters, and now its business partner is under investigation for very serious offences.

InterContinental pulling out of Tibet has always been the best thing for the oppressed Tibetan people; the company must surely now recognise that pulling out is in the best interests of its shareholders too.”
 
Information sourced by Tibet Watch.
 
For further information or comment, contact Dave O’Carroll:
E: dave@freetibet.org
T: +44 (0)207 324 4605
 
Notes for editors
 
(1)  ETG project website (Chinese), http://ls.hzdccd.com/main.html

(2)  ETG website (Chinese), group history, events calendar page (translation by Google) http://www.etgcn.com/jztt/jzzjhotel/jdjj.html

(3)  http://www.bjnews.com.cn/news/2013/11/07/291425.html

(4)  Daily Telegraph, 13 September 2013 http://www.telegraph.co.uk/news/worldnews/asia/china/10308029/Corruption-and-the-worlds-biggest-building.html

(5)  Malcolm Moore, Daily Telegraph, Tweet https://twitter.com/MalcolmMoore/status/378677568569761792

(6)  Free Tibet press release, 6 November 2013 http://www.freetibet.org/news-media/pr/tibet-demonstrations-more-20-intercontinental-hotels-worldwide-5-november  

(7)  http://www.forbes.com/lists/2008/74/chinarichest08_Deng-Hong_82MF.html

(8)  ETG website (Chinese), Group history, important honour page http://www.etgcn.com/jztt/jzzjhotel/jdjj.html