The Shanbei Oil Dispute(5)

According to Zhang, director of Yanchang Oil Group’s office, when everything was seized by the government, assets became the city government’s, and that Yanchang was just the operating organ. The board had four people from the provincial level, two from Yanan City and one from Yulin City, thus making the government the proprietor of all assets.

“In the end, the government makes the policy and the company will pay the cash,” says Kang Guoqing, one investor representative from Dingbian county. He believes that the provincial government has only given signals, but nothing concrete. How to deal with the dispute and who will compensate the investors has yet to be decided by the local government involved.

One source from Yanchang says that investors at that time were speculating wildly, and after their losses, didn’t pay the government any contract fees. Taxes were equally low. Later, the government used the tax revenue to calculate compensation, which was accordingly low.

Tong Zongrui, an investor representative, says “Perhaps there are isolated cases of tax evasion, but if so why didn’t the government manage things better? If people evade taxes, the government can arrest and fine them, but this and compensation are two entirely different matters…Compensation is compensation, if there is evidence of tax evasion, it can be taken out of that.”

More and more signals are emerging to suggest that the dispute is approaching a resolution. Qi Fengfei, one investor representative, recently discovered that several officials from Yushi City had discussed the Property Law, and that they said, “After the Law goes into effect, things will look better for you.”

For the past dozen years, thousands of investors have poured into Shanbei to speculate and dig for oil. And for everyone who’s profited nicely, there’s someone who’s lost everything.

[Chinese version]