China’s Guangzhou R&F co-chief accused of bribery in U.S., London court hears

11:38 pm Monday, December 12th, 2022

By Sam Tobin

LONDON (Reuters) -The billionaire co-chairman and CEO of Chinese developer Guangzhou R&F Properties Co Ltd is wanted in the United States, accused of paying kickbacks to obtain permits for a construction project in San Francisco, a court in London heard on Monday.

Zhang Li, who co-founded Hong Kong-listed R&F, is wanted on a provisional warrant issued in the Northern District of California that accuses him of participating in a scheme to bribe public officials between 2015 and 2020.

Ben Lloyd, representing U.S. prosecutors, said the scheme involved the payment of bribes to officials in San Francisco for the benefit of R&F’s U.S. affiliate, Z&L Properties Inc.

R&F, in a statement on its official WeChat account late on Monday, said it is taking “legal action” against a “false accusation”. Zhang was accused of bribery because of provision of “banquet dinner and hotel accommodation” to the former San Francisco public affairs chief who was visiting China, it said.

Zhang did not appear on Monday at London’s Westminster Magistrates’ Court, where his lawyers asked a judge to grant him bail ahead of a legal battle against extradition to the United States.

The 69-year-old, who is worth $2.3 billion, according to Forbes magazine, offered to pay a security of 15 million pounds ($18.4 million).

Mark Summers, representing Zhang, said 10 million pounds of the security would be provided by R&F. He added: “It cannot go higher than that because of the listing rules [of] the Hong Kong stock exchange.”

Zhang would provide the other 5 million pounds, Summers said.

Judge John Zani granted bail and imposed a 24-hour curfew on Zhang. The judge also said Zhang must be handcuffed to a member of his court-appointed private security team when he left his house for the purposes of attending court.

In a separate securities filing to the Hong Kong stock exchange on Tuesday, R&F said it did not provide any security money towards bail for Zhang in London, adding it has no interest in Z&L, which is owned by Zhang.

It said that the case will not have any material adverse impact on the company’s business and operations.

R&F shares, however, tumbled more than 13% on Tuesday, underperforming a 0.3% fall in the Hang Seng Mainland Properties Index.

(Reporting by Sam Tobin; Additional reporting by Clare Jim in Hong Kong; Editing by Alex Richardson and Muralikumar Anantharaman)