A SHELL company has allegedly earned 150,000 yuan (US$22,728) by making one-year social security payments for 37 ineligible homebuyers to purchase property in Shenzhen, Chinese-language media reported Thursday.
The company, whose name was not disclosed, surfaced after a Nanshan District court ruled a property purchase contract invalid because the homebuyer s social security payment was made on false employment contract.
The city government adopted a policy last April, allowing non-Shenzhen hukou holders to buy one home on the condition that they had paid for social security insurance in the city for at least a year.
However, many real estate brokers offered to help ineligible homebuyers make the payment with false employment to become eligible, the Southern Metropolis Daily said.
We helped them find some people who have knowledge of the social security account numbers and the passwords of local companies to pay for the insurance, said a regional manager of a real estate agency, who refused to be named. We connect the homebuyers to those who has connection [with the authorities] and can make the payment [on non-existing employment].
A man, identified only as Tang, who wasn t eligible to buy a home in Shenzhen, last June paid 7,000 yuan to his real estate agent who commissioned the shell company to make a one-year social security payment for Tang.
According to a payment record on the Web site of the city s social security bureau, the shell company paid 2,984 yuan for the one-year social security for Tang and bagged the remaining 4,000 yuan, the paper said.
The shell company, which was an import and export firm set up April 1, 2005, was no longer registered with the authorities after the year of 2005. It managed to make social security payments for 37 homebuyers last year, the paper said.
The manager denied receiving any commission from the shell company. But it s true that sometimes a homebuyer gave us some 2,000 yuan as a thank you gift.
The manager said it s a common practice among real estate agencies since the April 17 policy. Figures from Midland Realty, a Hong Kong-listed real estate broker, showed that about 60 percent homes sold since last April were purchased by homebuyers who had made one-year social security payment on false employment. The figure was similar to that provided by another major property broker Shihua Real Estate.
About 60 percent homebuyers since last April were not Shenzhen permanent residents, and few of them could produce social security payments of more than one year, said Xiao Xiaoping, director of the market research center of Shihua Real Estate.
However, it wasn t immediately known how many such companies existed. The social security bureau could not be reached for comments.
The city government tightened curbs on property market earlier this month. The new regulation was said to block the loophole by banning non-local taxpayers from buying a home even if they make a supplementary payment of tax or social security.
Media reports said about 20 percent home purchase contracts currently under registration paperwork were forced to be canceled after the new regulation. (SD News)
