By staff reporters He Xin, Luo Jieqi and Wang Heyan

(Caijing Magazine) An investigation of Shenzhen's former mayor Xu Zongheng, the most high-profile city official ever unseated in the city, revolves around allegations of bribery in connection with stadium and land projects for the 2011 Universiade Games, Caijing has learned.

Xu, who also served as the city's deputy party secretary before investigators swooped in, is under investigation by the Communist Party's central disciplinary committee for "serious violations," the official Xinhua news agency reported June 8. He was later removed from his party positions and resigned as mayor.
 
Caijing learned that authorities first detained Xu on June 5. His wife, Miao Lianxiang, who worked as deputy party secretary for Shenzhen's tax-free goods company, was placed under "supervision" at the same time.

Xu Zongheng

Other Shenzhen officials in the past have been investigated for corruption. But the case of Xu, 54, has stirred an unprecedented legal storm in a city that's grown rapidly since becoming China's first special economic zone in the early 1980s.

Xu spent 16 years working for the Shenzhen government and four years as the city's chief executive. Since his removal, Wang Rong, the party secretary of Suzhou in Jiangsu Province and a provincial party committee member, has been appointed acting mayor of Shenzhen.

Vanishing Act

The first public hint of trouble surfaced June 5 when Xu failed to show up for the 11th China Venture Capital Conference in Shenzhen. His absence was soon interpreted by many as a sign that he had been placed under "double regulation" – an extralegal investigation of a cadre by the party.
 
The mayor, who also served as a National People's Congress deputy and member of the Chinese People's Political Consultative Conference, spent that night in a local detention center. The next day was transferred to a disciplinary investigation office.

Disciplinary officials noticed something awry with Xu's activities while investigating Huang Guangyu, a wealthy entrepreneur and the founder of China's largest consumer appliance retailer Gome, Caijing learned. Huang has been detained since last fall on charges of securities fraud.

Disciplinary officials have linked Xu to a scheme involving contracts for stadium and land projects. The bidding process for stadium construction became controversial after the Shenzhen urban planning bureau rejected the initial winner's proposal, and instead selected a rival bid that doubled the project's cost to 3 billion yuan.

While Xu remains detained, the State Council has been investigating the bidding process but has yet to announce its findings.

Bubble Rider

Born in Hunan Province, Xu came to Shenzhen in 1993 to work in the city's party organization department. He earned a reputation for heavy drinking and loquaciousness, and once told the media he works about 15 hours a day.

Shenzhen's economic success grew during Xu's tenure as mayor. Colleagues admire his familiarity with economic data.

Over the years, Xu pushed through a number of major infrastructure projects. Currently, the city is planning to build five new subway lines by 2011, a second runway at Shenzhen Bao'an International Airport, and a new free-trade port in Qianhai Bay.

Under Xu, Shenzhen saw a real estate bubble grow and burst. The market was expanding in February 2006 when Xu said the previous year's 17 percent rise in housing prices was "reasonable."

After the housing market crashed last year, Xu told the media that the government would not intervene in the market.

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Full article in Chinese: http://magazine.caijing.com.cn/2009-06-21/110187315.html