The city of Huangshan in central China's Anhui province Loses 35 Million Yuan in Fraudulent Education Project. [Photo: chinanews.com]

The city of Huangshan in central China's Anhui province recently reported a fraud case, in which the local government lost 35 million yuan on an education program that ended in vain.

The case came out during the investigation on Yu Liang, Deputy Secretary General of the Huangshan municipal government, by the Anhui Provincial Commission for Discipline Inspection and Supervision Department.

Back in January 2011, Yu Liang was concurrently general manager of a local development-and-investment company in Huangshan. Later, in February 2014, the company acquired an unfinished project for a civil-aviation college for 93.5 million yuan through auction.

Although the project evoked public outrage, no one had expected that it would turn out to be fraudulent.

In January 2009, Zhang Minliang, a merchant from Hangzhou, east China's Zhejiang province, bid for a project to set up a civil aviation college in the Huangshan city. According to the agreement, Zhang Minliang was supposed to invest 150 million yuan in the project, with an initial funding of 30 million yuan. On the other side, local government officials in Huangshan will provide support for administrative approval, land permits and infrastructure construction, among other needed logistical and zoning obligations.

Zhang Minliang, however, could not pay the 30 million yuan; he acquired the 30 million yuan from a local construction company in Zhejiang, promising to grant the company opportunities to erect the main buildings on the campus. With this borrowed 30 million yuan, Zhang Minliang initiated the civil aviation training project.

Without more money to put into the project, Zhang Minliang became reluctant to continue with the project. However, the local government in Huangshan was unwilling to give up the project, and therefore paid 35 million yuan on behalf of Zhang Minliang for the aviation training project.

Zhang Minliang's application was later refuted by China's Education Ministry, since he did not own the piece of land for the college; Zhang was arrested by police and sentenced to nine years in jail and slapped with a 500,000-yuan fine.

However, no one was there to cover the loss of public funds at the hands of the local government in Huangshan for this failed investment attraction project.