A SERIES of conflicts between two companies exposed that the Yiwu small commodities wholesale center in Bao’an District has been rented out to a few hundred tenants for years despite the fact that the structures had been built without legal permits.

The subdistrict office in Shiyan, where the wholesale center is located, said in response Thursday that the office would prioritize dealing with the fact that the wholesale center had been operating illegally.

The decision to penalize the wholesale center, issued by the city’s anti-illegal construction department, had already been passed to the office five years ago, but the office did not deal with the incident or take over the property rights of the illegal structures.

Some of the shop tenants in the wholesale center said that some officials from the subdistrict office had even attended the opening ceremony of the center a few years ago, which had made the tenants believe that the center had gained support from the local government.

The wholesale center, located on Baoshi Road West in Shiyan, Bao’an District, is a 20-story building of shops, hotels and offices. The center is now being operated by a capital management company known as Hongyu.

One of the tenants, surnamed Ouyang, said that most of the tenants had recently learned that the building did not have the legal permits to be built and had been ordered to be confiscated in 2013. Ouyang said he had signed contracts with Hongyu, the operating company, for a 19-year tenancy.

“We decided to rent the shops because even the officials from Shiyan Subdistrict Office attended the wholesale center’s inauguration ceremony, so we believed that it was a legal project,” said Ouyang.

According to a letter to the tenants from the related municipal-level department, the Yiwu commodities wholesale center was developed by Ye Zhiwen and Luo Chunrong in November 2009. The project was required to stop in March 2012 by the Bao’an land supervision department, but the buildings were still completed that October.

On March 15, the department issued an administrative penalty ordering the building to be confiscated, but the developer rented out the building to another company, known as Huishangsha Co., for 19 years six months after the penalty was announced.

A representative of the developer, surnamed Chen, said that the Yiwu wholesale center had limited property rights and could still have normally operated businesses. However, the subdistrict office did not confirm Chen’s statement.

The Huishangsha Co. then rented out the buildings to another two people, Long Haibin and Wang Peng, who later bought 39.4 percent of Hongyu company’s shares, thereby enabling the Hongyu company to be the official landlord of the center in 2014.

Conflicts began to occur when the actual operating company, Hongyu, deliberately defaulted on the rent against Huishangsha even though the operating company had inked tenancy contracts with over 400 tenants.

According to a representative from Hongyu, the company did not pay the rent because the Huishangsha company failed to apply for fire safety qualification from the local authority in time and even organized dozens of disruptive activities that threatened tenants to make them leave over the past few years.

The conflicts between the two companies were not resolved even after the interference of local courts. The initial developers of the wholesale center said that they had no interest in getting involved in the conflicts. (Zhang Qian)