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Politics

Chinese Billionaire Arrested And Business Seized By State

MARY LOUISE KELLY, HOST:

China's private entrepreneurs are having a rough time. For four years, Beijing has been reining in some of the country's biggest companies. NPR's Emily Feng has the story of the latest target - a countryside billionaire.

AUTOMATED VOICE: (Non-English language spoken).

EMILY FENG, BYLINE: Driving into the Dawu Group headquarters is like entering the fiefdom of founder Sun Dawu. Everything in this de facto company town of about 9,000 employees is named after him.

AUTOMATED VOICE: (Non-English language spoken).

FENG: There's Dawu Hot Springs Village, Dawu Park, Dawu Nursery, Dawu Sports Stadium and so on. Dawu Group is not just an animal feedstock and fertilizer company. It's a self-contained society.

(SOUNDBITE OF MUSIC)

UNIDENTIFIED SINGERS: (Singing in non-English language).

FENG: At Dawu Hospital, a video monitor plays this song extolling the virtues of Dawu's health care services. Here's Pei Xinguang, a security guard for Dawu Elementary School.

PEI XINGUANG: (Through interpreter) All hospital care is completely free. All employees and their family get this membership card, and you just swipe for groceries, health care and so on.

FENG: In Chinese media interviews, Sun frequently quotes Plato's concept of the philosopher king, a benevolent autocrat who lives a simple life, rules his subjects with kindness and provides intellectual and material sustenance. Dawu employees say they like living in Sun's little commercial commune. Here's Pei, the guard, again.

PEI: (Through interpreter) They really treat workers well here. If you work hard, you're rewarded.

FENG: Now, Sun is in detention with 24 other employees, most of whom are his family. He personally faces eight charges, including illegal fundraising and mining. The school where Pei works is now monitored by government inspectors. And of the Group's main offices, an employee says the state is now running Sun's businesses and social services in his absence. She did not give her name because she was not authorized to speak publicly.

UNIDENTIFIED PERSON #1: (Through interpreter) Every subsidiary has a different local government team that has taken over control. We only found out after we came to work the day after Sun was detained.

FENG: Most of his charges stem from a property dispute with a state-run farm next door. Angered that local authorities were not adjudicating the dispute, Sun and his employees allegedly got into a fist fight with the state farm last August. Here's Yang Bin, a defense lawyer for the Sun family.

YANG BIN: (Through interpreter) As the Dawu Group expanded, some of the land use processes were not done to complete satisfaction. This is a simple administrative dispute over land, however, but it's become politicized.

FENG: Sun is no stranger to conflict. He's advocated for lowering taxes and regulations on farmers, and he's been deliberately provocative by hiring human rights lawyers China has since disbarred or imprisoned. Here's Zhao Guang, a partner at Beijing's Youbang Law Firm. He first met Sun nearly two years ago at a legal conference Sun convened. The Dawu Group was expanding, and Sun wanted to lease rural land, which China, being a socialist country, heavily regulates.

ZHAO GUANG: (Through interpreter) Some of the concerns that Sun brought up then have come true now. He asked how privately run businesses could protect their rights, including land use rights.

FENG: Recently, thousands of entrepreneurs like Sun have been imprisoned as part of an anti-gang campaign. Over the years, Sun often rallied his employees to push back against state regulators, actions that could now be construed as organizing political dissent. Here's Yang, his lawyer, again.

YANG: (Through interpreter) If Mr. Sun is found to be leading a gang, then all of his assets will be confiscated by the state. Decades of rural advocacy and reform efforts will be lost.

FENG: And so Sun's case is being closely watched not just by China's legal community, but also by its rural entrepreneurs who once hoped he might be a model for how to close the country's urban-rural gap.

Emily Feng, NPR News, Hebei Province, China.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.