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"We don't want to figure out how those complicated equity transfers came about, we just want to know how our village's collective land disappeared! Collective land worth hundreds of millions of yuan disappeared just like that, shouldn't we villagers have the right to know?" Recently, several villager representatives from Hongnan Village, Huajing Town, Shanghai reported to Fingertip News that about 50,000 square meters of land that originally belonged to the village collective had its nature changed at some point and was owned by other companies. The villagers tried to exercise their "right to know" but failed.

More than 2,000 villagers became "shareholders"

According to Ms. Zhou, a villager representative, Hongnan Village in Huajing Town where she used to live is now a relatively prosperous area in Shanghai. In the 1990s, in order to cooperate with urban development, Hongnan Village was abolished. In 1993, Shanghai Yuanzhong Industrial Co., Ltd. (hereinafter referred to as Yuanzhong Industrial) was established. The collective land owned by the villagers of Hongnan Village accounted for 95% of the shares, and Shanghai Huajing Collective Asset Investment Management (Group) Co., Ltd., which was actually controlled by the People's Government of Huajing Town, Xuhui District, accounted for 5% of the shares (hereinafter referred to as Huajing Assets). Ms. Zhou said that after the establishment of Yuanzhong Industrial, more than 2,000 villagers in Hongnan Village became "shareholders" and received equity certificates. Since then, the villagers have been able to receive dividends of 20,000 to 30,000 yuan every year. According to her, the source of the dividends is the earnings from the operation of the village collective land by Yuanzhong Industrial.

△The newly built building on the collective land of the former Hongnan Village (Photo provided by the parties)

In September 2020, in order to solve the problem of membership loss, the Shanghai Xuhui District Huajing Town Yuanzhong Economic Cooperative (hereinafter referred to as Yuanzhong Cooperative) was established under the organization of the Huajing Town Government and became the major shareholder of Yuanzhong Industrial, still holding 95% of the shares. According to the "Shanghai Rural Collective Assets Supervision and Management Regulations", after the establishment of Yuanzhong Cooperative, the implicit equity originally given to the villagers was converted into the shares of the village economic cooperative members and registered in the national rural collective economic organization registration system.

Suspected loss of collective land sparks doubts among villagers

Village representatives said that the doubts raised by the majority of cooperative members this time originated from the equity conversion of Shanghai Minrun Investment Management Co., Ltd. (hereinafter referred to as Minrun Company).

According to reports, in 2004, Yuanzhong Industry and Shanghai Juxin Real Estate Co., Ltd. (hereinafter referred to as Juxin Company) agreed to jointly establish Minrun Company. The two parties agreed that Yuanzhong Industry would use the land use rights of No. 1218 and No. 1412 Yishan Road, Xuhui District as investment after evaluation, and Juxin Company would use the cost of the construction project as investment. Yuanzhong Industry held 55% of the shares and Juxin Company held 45% of the shares. The term of the contract agreement was 20 years. The two companies also agreed that after the expiration of the agreement, the land would still belong to Yuanzhong Industry, and the buildings on the land would belong to Juxin Company.

In 2019, Minrun Company carried out an asset reorganization. According to the reorganization plan, among the assets of the original Minrun Company, the land and ground buildings of the Phase I, III and IV parks of Yuanzhong Industrial Park belonged to Yuanzhong Industrial, and the land and ground buildings of the Phase II park belonged to Minrun Company, and Yuanzhong Industrial withdrew from Minrun Company.

Village representatives said that the total construction area of ​​the second phase of Yuanzhong Industrial Park is about 50,000 square meters, which is the best-located and most valuable land in the village. According to the land prices in Shanghai, the village representatives conservatively estimated that the total price of the land should be around 1 billion yuan. According to the restructuring plan of Minrun Company, the land has changed from collectively owned land to Minrun Company. Village representatives believe that if the nature of the land has changed, it will cause the loss of collective land.

△The location of the collective land that villagers believe has been lost (Photo provided by the parties involved)

Villagers' attempt to exercise "right to know" was unsuccessful

According to the materials held by the villagers' representatives, on September 6, 2019, the Shanghai Xuhui District Collective Assets Supervision and Administration Committee and the Huajing Town Government responded to the "Huajing Town Collective Enterprise Investment Project Application and Approval Form" submitted by Yuanzhong Industry, clearly emphasizing: "Ensure that the property rights are clear and the collective assets are not lost. Please hold a shareholders' meeting in a timely manner and complete the relevant procedures in accordance with the regulations and procedures..."

In order to understand and verify whether there has been any loss of collective land, which in turn has led to the loss of collective assets, starting from 2022, village representatives wanted to exercise their "right to know" and began to apply to the Huajing Town Government and Yuanzhong Cooperative to disclose relevant information, but all failed. A reporter from Zhijian News saw in the judgment of 2022 Shanghai 7101 Xingchu No. 318 that the Huajing Town Government believed that the Town Collective Assets Supervision and Management Committee was specifically responsible for the preliminary review and filing of major matters of the town's collective economic organizations, so the members had no supervision and management authority over the collective assets of Huajing Town. The Asset Management Committee is an ad hoc institution of the Huajing Town Party Committee, and its actions are not open to the outside world. In addition, more than 700 members of the Yuanzhong Cooperative signed a request to hold a members' meeting, which was also rejected by the Huajing Town Government and Yuanzhong Cooperative.

Regarding the question of whether there was any loss of collective assets during the asset restructuring of Minrun Company, the Economic Development Office of Huajing Town also responded on June 28, 2024: "The restructuring process is complete and the formalities are complete, which complies with the relevant decisions on fund-raising supervision. After the completion of the restructuring, the net profit increased, and there was no huge loss of collective assets or damage to collective economic interests."

In response to this, the village representative believed that this was a substitution of concepts. "The increase in net profit is a matter of management and market, and it has no necessary logical connection with the loss of collective land and collective assets. You can't use collective land to make money just to increase profits, right?"

△Signatures of members requesting the convening of a cooperative members' meeting (Photo provided by the parties)

Legal experts say villagers’ “right to know” should be protected

Hu Shengli, an off-campus tutor for postgraduate students at the Law School of the University of International Business and Economics and director of Beijing Cuncheng Law Firm, told Zhijian News: According to Article 63 of the Land Administration Law of the People's Republic of China, the right to use collectively owned land by farmers shall not be sold, transferred or leased for non-agricultural construction. When Minrun Company was established, Yuanzhong Industry used the land use rights after evaluation and valuation. Minrun Company does not have the right to dispose of collectively owned land. Therefore, it is obviously illegal to distribute the land when Yuanzhong Industry withdraws.

Regarding the right to know requested by local villagers, Hu Shengli believes that the right to know of members of collective economic organizations is an important right enjoyed by members to know and obtain matters related to their own interests and collective common interests. It is a basic and protective right to protect the exercise of their membership rights, and its scope should include financial and business information. Therefore, it should be supported according to law.

On August 12, Fingertip News reporters tried to contact the head of the Yuanzhong Economic Cooperative and relevant leaders of Huajing Town who were reported by real name many times through phone calls and text messages, but received no positive response.

Source: Fingertip News