CHENGDU, China—When the government of this southwestern city needed a landmark for a new district, billionaire developer Deng Hong picked up the land cheap five years ago and erected a building almost three times the size of the Pentagon. Nearby, Wu Bing paved a motorway, while Liu Han put up schools. He Yan wired a jail with information technology and Wang Junlin's winery funded government charities.
Now, over the past several months, all of those tycoons have disappeared from view. Their absences come amid an alleged corruption scandal that may broadside the economic vitality of this gateway to China's rugged west and indicate a fresh front in Chinese political infighting.
Chengdu this month threw open its doors to what is perhaps the world's biggest building in terms of square feet, essentially a town enclosed in a glass-walled box. Yet New Century Global Center's owner and visionary, Mr. Deng, hasn't been seen since February. In May, websites advertised plans by Chengdu's government to auction a fleet of fancy cars seized from Mr. Deng and others, including his orange Lamborghini.
Mr. Deng's company, Exhibition & Travel Group China, says that its operations are running as usual but that it doesn't have any information about the boss. Neither he nor the other magnates were able to be reached to comment.
In the absence of much official explanation, employees and associates of missing business executives say they believe Chinese legal authorities and Communist Party investigators are holding them. Interviews with the employees and associates suggest a broader effort to root out a group of people connected through political and business ties. As Xinhua news agency put it when tycoons were toppled in a probe of senior officials six years ago in Shanghai: "Behind each corrupt official lurks a business big shot."
A former Chengdu mayor and other government officials and executives are in custody for suspected corruption, according to the local government. Authorities didn't respond to faxes and phone calls about the fate of Mr. Deng or the other tycoons.
The mystery around the executives' whereabouts mirror the way politicized crackdowns elsewhere in China have played out. Chinese party and judicial authorities routinely hold suspects for months of questioning without official confirmation to build criminal cases. Other times, they free their subjects without charges or public explanation.
A combination of official statements, corporate disclosures, domestic media reports and interviews suggest that dozens of people may now be under investigation in Chengdu. On a single day last month, the Chengdu government said it had "removed" more than 35 senior officials and executives from office, including the party-appointed chiefs of a local bank, the city subway operator and construction contractors.
Authorities provided no explanation for the dismissals, and it wasn't clear whether any of the officials were under investigation.
The party said Mr. Li will be tried for unspecified corruption. He wasn't available to comment.
What connects many of the people removed or missing this year is their success during Mr. Li's tenure, according to people with knowledge of the situation, company statements and domestic media reports.
In March, China's Ministry of Public Security said Mr. Liu, chairman of mining and infrastructure conglomerate Sichuan Hanlong Group and one of the detained billionaires, was being investigated on suspicion he harbored a fugitive. A person answering phones at the company said she doesn't have any information.
Ms. He, chairman of information technology firm Chengdu GoldTel Industry Group, is being held on suspicion of unspecified illegal business dealings, according to a July statement from her business. A police statement says she was detained in another Chinese province.
Chinese media have reported party investigators recently detained Mr. Wu, an infrastructure developer. A reason for the detention isn't known. His company, Zhong Xu Investment Corp., couldn't be reached.
Another tycoon named in media reports is billionaire liquor maker Mr. Wang, who runs Sichuan Langjiu Group. A company spokesman couldn't be located.
Meanwhile, energy industry equipment supplier Sichuan Mingxing Cable Co. draped its website in black and white on Wednesday to mourn the death of one of its top executives, board member He Yuying. A company statement didn't provide a reason, but local media widely reported that Ms. He fell from a building this week. Since July, Mingxing has issued statements saying three of its senior executives couldn't be contacted, including Chairman Li Guangyuan.
Politically, "they got in with the wrong crowd," said an associate of Mr. Liu, one of the billionaires believed to be detained and chairman of mining and infrastructure conglomerate Sichuan Hanlong Group. The associate said the case is too politically sensitive to discuss publicly.
Investigators questioned the associate extensively earlier this year, he said, and took control of Mr. Liu's offices and raided his homes.
Now uncertainty hangs over Chengdu, a city that in both 2011 and 2012 was declared by the Washington-based Urban Land Institute as the best place to buy real estate in China. This year, government figures show Chengdu's apartment prices are up 8% but the increase trails gains in other big cities.
"There is a kind of interdependency between business and the government," said John Osburg, a University of Rochester professor whose book, "Anxious Wealth," details three years he spent interviewing and socializing with Chengdu-based property, mining and car-industry magnates. "Government patronage is key for them," Mr. Osburg said.
While Mr. Li was mayor, Chengdu officials called for "coordinated development" to give the city international flair. Officials shifted Chengdu's axis southward into farmland, away from its downtown lined with bamboo teahouses and a giant waving Mao statue.
Few benefited from the push south more than 50-year-old Mr. Deng, a bushy-haired billionaire with hotel holdings in choice spots around Sichuan and Tibetan areas that carry brands of InterContinental Hotels Group Inc. The hotelier declined to speak about its relationship with Mr. Deng.
Under a glass-enclosed "holidome," swimmers cross a sandy beach to enter a wave pool where they—in lieu of an ocean view for a $28 admission fee—can watch cartoons of swaying palm trees and sharks on an LED screen 1.6 times the length of a football field. Its daily overhead costs are $24,000, the water park's manager said.
"I'm just so proud that Chinese can build such a big thing like this," a woman on her first visit said.
How much it cost to build is unclear. For the land underneath, Mr. Deng struck a deal: Records show he paid 633 yuan ($103) per square meter (10.8 square feet) five years ago, about 15% of the then-going rate for plots nearby, according to figures from consultancy Soufun Holdings Ltd. Chengdu's government also redirected the 18-lane avenue in front through a tunnel, opening space for a plaza, musical water fountain and a planned art museum, whose design Mr. Deng commissioned from Iraqi-British architect Zaha Hadid.
"If it is purely a commercial project, it is a very ambitious project," said Eric Wo, property firm Savills PLC's regional deputy managing director.
Mr. Deng, who is also known around Chengdu as a benefactor of artists, last made a public appearance in February, giving Shanghai officials a tour around the center construction site.
Now, over the past several months, all of those tycoons have disappeared from view. Their absences come amid an alleged corruption scandal that may broadside the economic vitality of this gateway to China's rugged west and indicate a fresh front in Chinese political infighting.
Chengdu this month threw open its doors to what is perhaps the world's biggest building in terms of square feet, essentially a town enclosed in a glass-walled box. Yet New Century Global Center's owner and visionary, Mr. Deng, hasn't been seen since February. In May, websites advertised plans by Chengdu's government to auction a fleet of fancy cars seized from Mr. Deng and others, including his orange Lamborghini.
Mr. Deng's company, Exhibition & Travel Group China, says that its operations are running as usual but that it doesn't have any information about the boss. Neither he nor the other magnates were able to be reached to comment.
In the absence of much official explanation, employees and associates of missing business executives say they believe Chinese legal authorities and Communist Party investigators are holding them. Interviews with the employees and associates suggest a broader effort to root out a group of people connected through political and business ties. As Xinhua news agency put it when tycoons were toppled in a probe of senior officials six years ago in Shanghai: "Behind each corrupt official lurks a business big shot."
A former Chengdu mayor and other government officials and executives are in custody for suspected corruption, according to the local government. Authorities didn't respond to faxes and phone calls about the fate of Mr. Deng or the other tycoons.
The mystery around the executives' whereabouts mirror the way politicized crackdowns elsewhere in China have played out. Chinese party and judicial authorities routinely hold suspects for months of questioning without official confirmation to build criminal cases. Other times, they free their subjects without charges or public explanation.
A combination of official statements, corporate disclosures, domestic media reports and interviews suggest that dozens of people may now be under investigation in Chengdu. On a single day last month, the Chengdu government said it had "removed" more than 35 senior officials and executives from office, including the party-appointed chiefs of a local bank, the city subway operator and construction contractors.
Authorities provided no explanation for the dismissals, and it wasn't clear whether any of the officials were under investigation.
Weeks after Xi Jinping was confirmed as Communist Party chief in November, the party ousted its No. 2 leader in the province of Sichuan, Li Chuncheng, who had been Chengdu's mayor through the previous decade until 2011. Mr. Li's fall from favor transformed the Sichuan capital, known for a panda center and home to some 14 million people, into the epicenter of a fresh corruption crackdown.
The party said Mr. Li will be tried for unspecified corruption. He wasn't available to comment.
What connects many of the people removed or missing this year is their success during Mr. Li's tenure, according to people with knowledge of the situation, company statements and domestic media reports.
In March, China's Ministry of Public Security said Mr. Liu, chairman of mining and infrastructure conglomerate Sichuan Hanlong Group and one of the detained billionaires, was being investigated on suspicion he harbored a fugitive. A person answering phones at the company said she doesn't have any information.
Ms. He, chairman of information technology firm Chengdu GoldTel Industry Group, is being held on suspicion of unspecified illegal business dealings, according to a July statement from her business. A police statement says she was detained in another Chinese province.
Chinese media have reported party investigators recently detained Mr. Wu, an infrastructure developer. A reason for the detention isn't known. His company, Zhong Xu Investment Corp., couldn't be reached.
Another tycoon named in media reports is billionaire liquor maker Mr. Wang, who runs Sichuan Langjiu Group. A company spokesman couldn't be located.
Meanwhile, energy industry equipment supplier Sichuan Mingxing Cable Co. draped its website in black and white on Wednesday to mourn the death of one of its top executives, board member He Yuying. A company statement didn't provide a reason, but local media widely reported that Ms. He fell from a building this week. Since July, Mingxing has issued statements saying three of its senior executives couldn't be contacted, including Chairman Li Guangyuan.
Politically, "they got in with the wrong crowd," said an associate of Mr. Liu, one of the billionaires believed to be detained and chairman of mining and infrastructure conglomerate Sichuan Hanlong Group. The associate said the case is too politically sensitive to discuss publicly.
The associate said he also knows another of the magnates, Mr. Deng, and added he believes the men may have been detained because of their ties with politicians more senior than the former mayor, Mr. Li.
Investigators questioned the associate extensively earlier this year, he said, and took control of Mr. Liu's offices and raided his homes.
Now uncertainty hangs over Chengdu, a city that in both 2011 and 2012 was declared by the Washington-based Urban Land Institute as the best place to buy real estate in China. This year, government figures show Chengdu's apartment prices are up 8% but the increase trails gains in other big cities.
"There is a kind of interdependency between business and the government," said John Osburg, a University of Rochester professor whose book, "Anxious Wealth," details three years he spent interviewing and socializing with Chengdu-based property, mining and car-industry magnates. "Government patronage is key for them," Mr. Osburg said.
An overlap in social, business and government relationships has a long history in Chengdu, which around 1,000 years ago was the first place in the world to adopt paper money. Those ties traditionally were rooted in informal brotherhoods called pao-ge, whose legacy still influences society, said Wang Di, a specialist on the subject at Texas A&M University.
While Mr. Li was mayor, Chengdu officials called for "coordinated development" to give the city international flair. Officials shifted Chengdu's axis southward into farmland, away from its downtown lined with bamboo teahouses and a giant waving Mao statue.
Few benefited from the push south more than 50-year-old Mr. Deng, a bushy-haired billionaire with hotel holdings in choice spots around Sichuan and Tibetan areas that carry brands of InterContinental Hotels Group Inc. The hotelier declined to speak about its relationship with Mr. Deng.
His New Century Global Center, built adjacent to Chengdu government headquarters, features oceanic flourishes like a gull-wing roof and sandy hues. Its hotel lobby is wide enough to house an airplane; restaurants are equipped for karaoke; a Korean retailer anchors a mall, and more than 200 elevators reach the thousands of offices that ring the palatial building. Space sells for a quarter the price in Shanghai, a salesman said.
Under a glass-enclosed "holidome," swimmers cross a sandy beach to enter a wave pool where they—in lieu of an ocean view for a $28 admission fee—can watch cartoons of swaying palm trees and sharks on an LED screen 1.6 times the length of a football field. Its daily overhead costs are $24,000, the water park's manager said.
"I'm just so proud that Chinese can build such a big thing like this," a woman on her first visit said.
How much it cost to build is unclear. For the land underneath, Mr. Deng struck a deal: Records show he paid 633 yuan ($103) per square meter (10.8 square feet) five years ago, about 15% of the then-going rate for plots nearby, according to figures from consultancy Soufun Holdings Ltd. Chengdu's government also redirected the 18-lane avenue in front through a tunnel, opening space for a plaza, musical water fountain and a planned art museum, whose design Mr. Deng commissioned from Iraqi-British architect Zaha Hadid.
"If it is purely a commercial project, it is a very ambitious project," said Eric Wo, property firm Savills PLC's regional deputy managing director.
Mr. Deng, who is also known around Chengdu as a benefactor of artists, last made a public appearance in February, giving Shanghai officials a tour around the center construction site.
On a recent night, Mr. Deng's 22-year-old son, Lang Lang, was holding court at an outdoor beer hall he runs in Chengdu but declined to answer questions. "I'm not able to tell you much," he said in a follow-up text message. LINK
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