Zhang Li, the co-founder and CEO of Guangzhou-based R&F Properties, has been formally accused of bribery by United States authorities, a London court heard on December 12. The Hong Kong-listed company stated through its official WeChat account that it planned to fight what it called “false allegations” that Zhang engaged in bribery by “hosting a dinner in China for a former public affairs executive in San Francisco and providing him with hotel accommodation.”
According to Bloomberg, Zhang was temporarily released on December 12 after paying 15 million British pounds in bail to a local court in London. According to the report, Zhang was arrested after the US accused him of obtaining a development project contract in California through kickbacks and funds. Zhang is raising objections in order to avoid his extradition to the US. He is now confined at all hours in a 43rd-floor London apartment, monitored by security guards and CCTV cameras.
On the morning of December 13, R&F Properties said in an announcement, “The company is aware of media reports that the London court granted bail to Zhang Li in a pending case concerning Z&L Properties Inc in the United States. We did not provide any security for bail and have no interest in Z&L Properties Inc. owned by Zhang Li and his related parties. The case will not have any material adverse impact on our business and operations.”
In August 2015, R&F Properties acquired 555 Fulton, a high-end apartment development project in downtown San Jose, Silicon Valley, California through its Full Power Properties. On January 21, 2020, Mohammed Nuru, the head of the Public Affairs Department of San Francisco, was arrested on corruption charges. According to the specific information mentioned in the indictment against Nuru, R&F Properties, a third party involved in the case was revealed. Walter Wong, the former director of the Chinese General Chamber of Commerce, acted as a matchmaker to settle the problems encountered by R&F Properties’ 555 Fulton project by bribing Nuru.
According to the indictment against Nuru, he was invited to travel to China in 2018, and the expenses were fully covered by R&F Properties. While in China, he visited the private residence of a billionaire developer and accepted a bottle of wine worth $2,000, but he did not report it as legally obligated. The indictment was published on the website of the US Department of Justice on December 17, 2021, but the name of the Chinese developer was not disclosed. Both Wong and Nuru have pleaded guilty.
Founded in 1994, R&F Properties is a comprehensive group with real estate development as its main business and diversified development across the fields of hotel development, commercial operations, cultural and sports tourism, internet, medical care and design.
Zhang Li, a former government official, joined the real estate industry in 1993, and joined hands with wealthy Hong Kong businessman Li Sze Lim to establish R&F in Guangzhou. In February 2010, Zhang Li was included in Forbes’ list of billionaires, ranking 556th. In 2013, he ranked 15th in the New Fortune China Rich List.
R&F’s sales exceeded 130 billion yuan in 2020, but the company quickly fell into a liquidity crisis. Although it has been relatively active in pursuing debt restructuring measures, in the first half of this year, it recorded a net loss of 6.899 billion yuan and a property sales turnover of 15.149 billion yuan, a year-on-year decrease of 58%.