Bye-Bye Birdies: Wanda Scratched From Swanky Golf Clubs

Real estate and entertainment giant Wanda Group has been told to close its golf courses in a scenic resort area in Northeast China, as part of an ongoing government frugality campaign that has seen dozens of courses closed this year.

The closure order for the courses in the Changbai Mountain resort area of Northeast China’s Jilin province was contained in a terse statement issued by the Fusong County government last Friday. It pertained to two clubs, Songgu, which operates two courses, and Baihua, which operates a third.

“On Sept. 9, 2017, the Supervisory Authority of Fusong County issued a corrective notice order, ordering a halt to related business activity,” the Fusong County government said, naming the operator of the golf courses as recipient of the notice.

Wanda declined to comment on the matter.

The company had been working with the local government to make changes to the courses until receiving the order to halt all operations last week, a source with direct knowledge of the situation told Caixin. The source added that the land had previously been approved for development as golf courses, and that the local government had agreed to compensate Wanda for any losses arising from disputes involving the land use.

The closures come amid broader national campaigns aimed at stamping out corruption and encouraging frugality among top officials in government and at big state-run companies. Golf courses became a particular focus in both campaigns due to their image as a playground for overindulgent and corrupt high officials.

Construction of new golf courses was officially banned in 2004, but many such facilities continued to be built as developers exploited various loopholes to tap growing demand. The number of courses rose from less than 200 at that time to 683 at the start of this year, when a crackdown was launched that saw 111 of those ordered to close, according to the official Xinhua News Agency.

Media reports said that the Wanda courses had experienced relatively little impact from the original crackdown and were originally allowed to continue operating.

The shutdown comes as Wanda actively sheds a number of other real estate assets to pare down debt, following a breakneck expansion over the last six years that saw it spend billions of dollars to buy a wide range of global entertainment assets, including movie studios and cinema operators. In July the company announced a plan to sell most of its hotel and theme park assets to two buyers for 63.75 billion yuan ($9.6 billion).

Contact reporter Yang Ge (geyang@caixin.com)