In China, 'Disney' deals turn out to be fantasy

In 2013, Meng Dekai, a Disney executive in China, signed a deal with the mayor of Hefei to build a $1.3 billion “Disney cultural and industrial park.”

It was one of several agreements with multiple cities in China that Meng apparently signed. The only problem: He was not allowed to do so.

The Walt Disney Company said on Wednesday that it had parted ways with Meng — it did not say whether he resigned or was fired — after opening an investigation into allegations that he had signed deals with local governments for Disney-related projects.

The brazenness of the apparent duplicity highlights the risks for foreign companies operating in China, where counterfeiting and corruption are still rampant despite repeated government campaigns to crack down. Reports of Meng’s deals across the country have also led to widespread confusion about Disney’s future plans across China, the world’s second-largest economy.

The company said it started the investigation after The Paper, a Chinese news website, reported in February that Meng had signed deals for projects with several Chinese cities.

A Disney spokeswoman said the company was “investigating,” when asked whether it would push for a criminal inquiry. Meng could not be reached for comment.

“This is the weirdest thing I’ve ever heard of when it comes to fraud against a foreign business,” said James McGregor, chairman of the greater China region for the consulting firm APCO Worldwide. “I mean, it’s so big and it’s so public, it’s such a big name company. What was he thinking?”

Along with the Hefei deal, Meng, who was employed by Disney as a director of special projects, signed agreements in the cities of Ningbo, on the eastern Chinese coast, and Zhengzhou, in the centre of the country.

The Henan Daily said on its public account on WeChat, an instant-messaging app in China, that Walt Disney Company (China) had signed a memorandum of understanding with the Henan government to build a site in Zhengzhou, which could include “even the Disneyland parks that everyone knows so well.”

“Disney is here! Disney has really come to Zhengzhou!” the paper said.

And the Hefei Network, a news website, said in 2013 that the “Disney project” that Meng signed with the city’s mayor, Zhang Qingjun — who has since been dismissed for corruption — would stretch across 1,300 acres and be built over three years.

In January of this year, the state-run Jianghuai Morning News reported that a Disney project in the same province would consist of a theme park based around the mobile video game Angry Birds (which is not produced by Disney, but the Finnish company Rovio), film special effects production offices, and other offerings. It is unclear whether the 2013 deal announced in Hefei, in one of China’s poorest provinces, is the same one.

In February, The Hangzhou Daily reported that a building in Ningbo was emblazoned with a Disney logo.

A search on Tianyancha, a corporate database in China, showed that Meng’s name was linked to 21 companies in the country, with him listed either as the legal representative or executive director. Most of the companies’ names start with the same Chinese character for Disney, “Dee Magic,” and contain “America” in them.  Meng had also registered two companies in Hong Kong, a search on the city’s database found.

The Disney spokeswoman said that neither Dee Magic nor any of its affiliates had been authorised by Disney to promote projects or sign deals on behalf of the company, and that they had been told “to immediately cease any unauthorised activity.”
 

©2017 The New York Times News Service