Aleba Water Correspondence with the Xi'an Government 2008-2014

Aleba Water Correspondence!!!Summary: In 2008, in conjunction with the China National Land Survey, the Chinese government confiscated property owned by U.S. investors. The property consists of a water factory located on the outskirts of Xi’an, China’s ancient capital, in Lantian County. The loss to U.S. investors totals more than $2.5 million. !!For the past six years, the U.S. investors have been attempting to resolve this issue following Chinese laws and regulations. They enlisted the support of two U.S. Senators and the U.S. Ambassador to China Gary Locke. Despite these efforts, the Chinese government has failed to reverse its position, and the confiscation stands. !!Corruption in China is a pervasive and growing problem. The Aleba Water story gives you an insight into how this corruption works to enrich a handful of Chinese officials at the expense of U.S. investors and the Chinese people.

2014 !Aleba Water

Correspondence

333 Texas Street Shreveport, LA 71101 !T 216-650-7267

ALEBA WATER

COMPANY

July 8, 2014

!Wu Yongping Vice Mayor Xi’an Government Xi’an, China !Dear Vice Mayor Yongping: !Thank you for meeting with us and telling us the truth. We agree with you that this problem is caused by the Xi’an Land Bureau. I have only one request. !Our employees are subject to your jurisdiction in Lantian. Please insure the physical safety of their family and them from the gangsters. They have been threatened and attacked. We hope that you can keep them safe. !Sincerely,

!!Edward F. Morrison President Aleba Water Company, LLC !Chairman Xi’an Aleba Water Company

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ALEBA WATER

COMPANY

July 8, 2014

!Dong Jun Mayor Xi’an Government Xi’an, China !Dear Mayor Dong: !Since our meeting with Wang De An in June 2012, matters began to im-prove regarding the confiscation and blockade of our Joint Venture. I remind you that our Joint Venture has been approved by the Xi’an gov-ernment. We also have an approval document from the Central Gov-ernment’s Ministry of Commerce under the State Council. !However, since the involvement of Deputy General Secretary Qian Huwei, matters have gotten worse. We had hoped that the support of our Embassy in Beijing would underscore that this controversy is not “a fight of one Chinese against another Chinese using an American gun”. !The matter is quite a bit more serious. The confiscation of U.S. investor property in Lantian County comes after our Joint Venture has been op-erating continuously for nearly 17 years on the same seven mu of land. Our investors made significant financial commitments based on the in-tegrity of your govenrment. !The problem centers on a land certificate to Runjia Real Estate Company. This certificate confiscates our property. This certificate was issued by the Xi’an Land Bureau. We have raised numerous requests to investigate the fraudulent issuance of this certificate by corrupt Land Bureau officials. Qian has made no investigation of this serious matter. Instead, he is pro-tecting these corrupt officials. What is worse, Qian is interfering directly in our Joint Venture by trying to get our factory manager to move away. Gangsters have subsequently threatened to “make him disappear”.

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There is no way for us to have this issue resolved here in Xi’an. We will now seek compensation from the Central Government. This matter is no longer an economic issue. It has become a political issue that we will be raising in Washington, D.C. with our Congressional representatives. !We were told that former Mayor Chen Baogen and you have given many instructions to resolve this matter in Lantian. We also know that Mayor Chen Baogen instructed Lantian officials to “follow the Chinese laws”. We believe that you have acted in good faith, and we appreciate the support we have received from Wang De An. !However, your Deputy General Secretary Qian Huwei leaves us no choice but to abandon our efforts in Xi’an and to move our work to Bei-jing and Washington. Wang De An was gracious, listened carefully to our issues, and opened the gates to our factory. In contrast, Qian Huwei has refused to meet with me, has approved the blockade of our factory, and promoted the persecution of our employees. !I assure you, this will not be the last you hear of Xi’an Aleba Water Company. Our U.S. investors will never give up our fight against your government’s corrupt officials. !Unfortunately, despite your efforts, the corruption in your government is so pervasive, so out of control, that after six years of attempting to re-solve this matter accordion to Chinese laws and regulations, we believe that no U.S. investor is safe making financial commitments in Xi’an. !Sincerely,

!!Edward F. Morrison President Aleba Water Company, LLC !Chairman Xi’an Aleba Water Company

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ALEBA WATER COMPANY

July 5, 2014

!!Discipline Inspection Committee Communist Party Committee Shaanxi Province Xi’an, China !Dear Sir or Madam: !My name is Edward Morrison. I am a United States citizen. In 1998, at the invitation of Lantian County government, I began a project to help the Lantian government develop its water resources. I raised 4.8 million RMB (around 600,000 U.S. dollars) from the ATCO Investment Compa-ny, based in the U.S., and the Imagene Company, based in Japan. In 1998, the Joint Venture invested these funds in the Lantian Industrial Park on 7 mu of land. !With this letter I would like to accuse Zhao Jidi, Director of Feng Wei District, Land and Resources Bureau, of economic crimes he committed when he was the Land Bureau Director in Lantian County in 2008. He has committed two major crimes. First, he forged documents in the Sec-ond Land Survey which took place in 2008. This forgery violates China State Council’s 518 Order and China National Land and Resources Min-istry Order Number 45 on the Land Survey. !Second, Zhao Jidi forged documents in issuing a land certificate to Run-jia Real Estate Company in Lantian County. !Third, in issuing a land certificate to Runjia, he misused his power to for-give the fees owed by Runjia on this transaction. These fees include the land use fee, the land use conversion fee, and the land appreciation fee. We estimate that these fees are approximately 7 million RMB lost to the Lantian government and the Lantian people.

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We accuse him of these crimes in 2009 in a complaint to the the Lantian Government and the Lantian Communist Party Committee. In 2010, lantern Party Secretary Li Yi asked Vice Mayor Chen Xiwen the follow-ing conclusion: Zhao Jidi misused public power for private gains in issu-ing the land certificate to Runjia. !Zhao Jidi violated China’s laws on land management. He violated the required procedure of selling land with Auction and Tender. By doing this action, he confiscated U.S. investor property and conveyed it to Run-jia. He also illegally converted Lantian public property and conveyed it to Runjia. !Through Vice Mayor Chen Xiwen over the phone, Li Yi told us, “You should prepare an official accusation letter against Zhao Jidi and send it to the Lantian Government Mayor Miao Zhi Zhaong. When Mayor Miao signs this complaint, it will be sent to the Peoples Procurate. Zhao Jidi has confiscated U.S. investor property and gave it to Runjia. He also converted Lantian public property and gave it to Runjia.” !Within 3 days of Li Yi’s instruction, we prepared this formal letter and sent it to the Lantian Government. !In one month, we received no news. We asked Vice Mayor Chen Xiwen what happened. We were told Mayor Miao was reluctant to sign this complaint letter, so the Peoples Procurate never got involved. Nothing was done to pursue the crimes of Zhao Jidi. !We were told that the Lantian Government could do nothing about Zhao Jidi, because he had been promoted to be the director of Feng Wei Dis-trict Land Bureau in 2009. He was now outside the power of the Lantian government. His position is now higher than the Lantian government fa-cials, and his is not longer within the control of the Lantian government control. We were told to go the the provincial level government and Par-ty to accuse him. !That is why we now come to you. The facts about his crimes are attached to this letter in Chinese. !We look forward to your response. We are sending copies of this com-plaint letter to the U.S. Embassy, our U.S. Senators Vitter and Landrieu, We are also sending this letter to the Central Party Discipline Committee in Beijing. !Page "2

Please keep me informed of your actions. My e-mail address is [email protected]. !Sincerely,

!!Edward F. Morrison President Aleba Water Company, LLC

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mailto:[email protected]


ALEBA WATER COMPANY

June 30, 2014

!Miao Zhizhong Party Secretary Lantian County Chinese Communist Party Xi’an, Peoples Republic of China !Dear Miao Zhizhong: !This letter sets for crimes undertaken by Tang Anyi in regard to our Joint Venture property in Lantian County. As you know, Tang Anyi is the Lantian Land Owner-ship Section Chief. Tang undertook numerous actions to confiscate Joint Venture property. Specifically, Tang has committed the following crimes: !1. Tang illegally conveyed 36.9 mu of land to Runjia and prepared fraudulent

documents. Specifically, he prepared a map conveying 36.9 mu of land to Run-jia. The Lantian government approval document for the Joint Venture refers to 30 mu of land.

2. Tang forged a second map during the Second Land Survey to benefit Runjia. On this map, he forged the signature of a neighbor named Ciao Jingyi. There is no such person. Tang cleverly tried to hide this forgery. Aleba Soya has two neighbors. The first is Aleba Water, our joint venture. The second is Sanlizhen Construction Company. Mr. Fan Xuanmin is the legal representative. This com-pany has an accountant whose name is Tao Jingyi. Instead of presenting his forged map to Fan Xuanmin for signature, Tang fabricated the name Ciao Jingyi.

3. Tang has removed this forged map used in the Second Land Survey from the files. Tang refused to provide a copy of this map to our lawyers when we re-quested a copy in 2010. At that time, however, our lawyers made an audio recording in which Tang clearly describes the signature on this map. The Land Survey Regulations issued by the State Council on February 7, 2008 (Order of the State Council No. 518) under Article 15 clearly states that the land survey-ors shall not forge materials in completing their survey.

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4. Tang has failed to collect any land appreciation fees, land use conversion fees, or land usage fees from Runjia. This failure has resulted in the loss of several million RMB from the Lantian people.

5. Tang’s confiscation of U.S. investor property has resulted in the loss of $2.4 million to U.S. investors. We now demand compensation from the Lantian gov-ernment.

6. We are unaware if Tang illegally received any funds from Runjia to compen-sate him for his illegal acts. However, it stands to reason that Tang has received bribes directly from Runjia. !

We ask the Lantian Party Committee investigate these matters and punish Tang. Our lawyers have detailed evidence of his crimes. If your Committee fails to act, our next step will be to file formal complaints directly with the the Xi’an Party Committee and the Shaanxi Party Committee. If still no action is taken, we will take this matter to the Central Committee in Beijing to expose these crimes supported by our evidence. ! Sincerely,

" President Aleba Water Company, LLC

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ALEBA WATER

COMPANY

April 2, 2014

!Vice Mayor Wu Yongping Lantian Government, Lantian County c/o Liang Wanqing !!Foreign Affairs Office Xi’an Municipal People's Government No. 109 Fengg Balu Weiyang District Xi’an, Peoples Republic of China !Dear Vice Mayor Wu: !You are responsible for resolving the difficult issues facing our Joint Venture facto-ry. Unfortunately, you are failing in your work, and you are aligning yourself with other corrupt officials in your County. This decision by you will carry very signifi-cant problems. You are now becoming a member of the criminal conspiracy that has confiscated U.S. investor property. !As you know, the gangsters led by Sun Junhong have now completely obstructed our factory again. In your discussions with Wang Hui, you have urged him to go to Lantian County to negotiate with the gangsters. This step is completely unac-ceptable. !The gangsters are not part of our joint venture. To be a member of our Jount Ven-ture, the party must be accepted by our Board of Directors. As I have indicated consistently over all of my correspondence with Lantian and Xi’an Government of-ficials, Sun Junhong is not a member of our Joint Venture. We will not negotiate with him or with any entity controlled by him. !If you believe that Sun Junhong and his conspirators are Board Members, first produce the Xi’an government approval documents for the change in the Board of Directors of the Joint Venture. Our Joint Venture contract, which your government

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has approved, requires Board approval of any change in the Board. At no time has the Board made such a change. !You are now aligning yourself with the criminal conspiracy in Lantian County. This is not a wise decision. We will bring your name to officials in Beijing and Washing-ton, D.C., in addition to the other officials who are responsible for this confiscation of our property. !Sincerely,

" !President Aleba Water Company, LLC Copies to: U.S. Embassy U.S. Senator Mary Landrieu U.S. Senator David Vitter

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ALEBA WATER

COMPANY

January 21, 2014

Wang De An Chief of Staff Foreign Affairs Office Xi’an Municipal People's Government No. 109 Fengg Balu Weiyang District Xi’an, Peoples Republic of China !Dear Wang De An: !This letter protests the failure of the Lantian Government to maintain access to our factory. Our factory is now — once again — blocked by gangsters who are collab-orating with corrupt officials in Lantian County. !I am once again demanding that your government to protect our property from confiscation and our employees from physical assault. !In the months since we have spoken, it is clear that your government is now col-laborating with these corrupt officials by issuing a fraudulent land certificate cover-ing our property. Gangster Sun Junhong is trying to cover up his actions with this fraudulent certificate. !As I explained to you, this corruption started with the fraudulent land certificate prepared by corrupt official Zhao Jidi, who is now a member of your government in the Xi’an Land Bureau. Zhao Jidi used his official office for private gain by ille-gally issuing a fraudulent land certificate to Gangster Sun. !We renew our demand that our company properly is registered under the 2008 All China Land Survey. This request follows State Council Order 518 regarding the All China Land Survey; China Ministry of Land and Resources Order 45 regarding the All China Land Survey; and Shaanxi Provincial Government Document 34 re-garding the All China Land Survey. The failure of your government to follow Chi-nese law has resulted in the confiscation of U.S. investor property.

!By your actions, the Xi’an Government assumed responsibility for returning our property, including the removal any obstructions to our property. I also demand that you protect our employees from physical assault. !You are now in direct violation of your obligations to US investors under both in-ternational and China law. !I will be coming to Xi’an in March to directly seek damages of $2.7 million from your government. We are also relaunching our web site on Xi’an corruption: xian-corruption.net. Prior to traveling to China, I will be traveling to Washington D.C. to brief both Senator Landrieu and Senator Vitter. I will be requesting that they take up this matter directly with China’s Ambassador to the U.S. Chiu Tiankai. !Sincerely,

" President Aleba Water Company, LLC !cc: U.S. Embassy US Senators David Vitter and Mary Landrieu

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http://xiancorruption.net


ALEBA WATER

COMPANY

January 21, 2014

!Vice Mayor Wu Yongping Lantian Government, Lantian County c/o Liang Wanqing !!Foreign Affairs Office Xi’an Municipal People's Government No. 109 Fengg Balu Weiyang District Xi’an, Peoples Republic of China !Dear Vice Mayor Wu: !Thank you for being responsible for resolving the difficult issues facing our Joint Venture factory. Unfortunately, your efforts have fallen short. Yesterday evening, the gangsters led by Sun Junhong locked and obstructed our front gate. !Xiao Dei, our factory manager, has been unable to contact you. If he is unable to connect with you to open our factory, we have no choice but to contact Wang De An directly and inform him of your failure. !In light of the failure of your government, I have ordered that our Xian Corruption web site be relaunched. The web site provides details on the corruption in your government. I am preparing a letter that will be sent directly to Wang De An to-morrow. !I will be coming to Xi’an in March to negotiate with the Xi’an Government. I will also invite representatives from the U.S. Embassy to accompany me. Prior to com-ing to Xi’an, I will be visiting the head office of the Discipline Committee in Beijing to make a formal complaint against both the Lantian and Xi’an governments. We know that the Committee has sent an inspection group to Shaanxi Province to col-lect corruption information. ! -" - 1

We renew our request to the Lantian Government to have our company properly registered under the 2008 All China Land Survey. This request follows State Council Order 518 regarding the All China Land Survey; China Ministry of Land and Resources Order 45 regarding the All China Land Survey; and Shaanxi Pro-vincial Government Document 34 regarding the All China Land Survey. !Since your government and the Xi’an Government refuse to follow Chinese law, you have confiscated U.S. investor property. We are seeking damages from the Xi’an government of $2.7 million. !I had hoped that you would realize that this matter has now received the attention of the U.S. Embassy in Beijing. We will continue reporting to to the Embassy your progress in resolving these matters. Your failure to reverse the confiscation of our property will, I assure you, only make matters worse. !Sincerely,

" !President Aleba Water Company, LLC Copies to: U.S. Embassy U.S. Senator Mary Landrieu U.S. Senator David Vitter

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2013 !Aleba Water

Correspondence

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333 Texas Street Shreveport, LA 71101 T 216-650-7267

March 15, 2013

Wang De An Chief of Staff Foreign Affairs Office Xi’an Municipal People's Government No. 109 Fengcheng Balu, Weiyang District Xi’an, Peoples Republic of China SUBJECT: Confiscation of US Investor Property by the Xi’an Government Dear Wang De An: As I mentioned in our meeting on June 1, 2012, we will not negotiate with the Lantian Government and Vice Mayor Chen Xiwen. The Lantian Government con-fiscated our property in 2008 by selling our property to the criminal gang, led by Sun Junhong. Two days ago, Sun Junhong threatened to tear down our factory within the next week. Our Joint Venture was approved by China’s Central Government in 1998 (Exhibit A). In 2008, the Lantian Government, in direct violation of the laws relating to the Second All China Land Survey, sold our Joint Venture property to Sun Junhong’s gang. Former Lantian Land Bureau Director Zhao Jidi directed this confiscation. He issued fraudulent documents stating that there was no controversy concerning our property (Exhibit B). This fraudulent document directly violates a State Council Order regarding the Land Survey. In fact, Zhao Jidi knew that Aleba Water Company, a legal Joint Venture operat-ing on the property since 1998, had made repeated requests to the Lantian Land Bureau to register our property under the All China Land Survey. He had turned down these requests. I explained this confiscation to you in June 2012 and asked you to investigate. You requested time. We have given you eight months.

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The Lantian County Government has no power to reverse this confiscation. Only the Xi’an government can make this decision. Since 2009, the Lantian Land Bu-reau is under the direct authority of the Xi’an Land Bureau. Unless you take steps to reverse this confiscation, your government becomes a party to it. We renew our request your assistance to have our company properly registered under the 2008 All China Land Survey. This request follows State Council Order 518 regarding the All China Land Survey; China Ministry of Land and Resources Order 45 regarding the All China Land Survey; and Shaanxi Provincial Govern-ment Document 34 regarding the All China Land Survey. I made this request last June, and your government has continued to allow this confiscation to stand. I remind you that China’s Central Government approved our Joint Venture in 1998, and we have been in continuous operation since 1998. Sincerely,

President Aleba Water Company, LLC Copy to: U.S. Embassy, Beijiing US Senator David Vitter US Senator Mary Landrieu

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!!MEMORANDUM!!TO:! ! Andrew!Billard!!FROM:!! Ed!Morrison,!Aleba!Water!Company!!SUBJECT:!! Background!on!confiscation!of!Aleba!Water!Company!!DATE:!!! March!15,!2013!!This!memorandum!provides!background!on!the!confiscation!of!U.S.!investor!property!in!Lantian!County,!Xi’an!Municipality,!Shaanxi!Province.!!We!are!requesting!the!Embassy’s!assistance!in!getting!our!property!registered!under!the!All!China!Land!Survey.!!!

1. Xi’an!Aleba!Water!Company!received!approval!to!establish!a!Joint!Venture!in!1998!to!produce!mineral!water!in!Lantian!County,!Xi’an!Municipality!(Exhibit!A).!Operations!began!that!year!to!produce!mineral!water!in!five!gallon!bottles!for!sale!in!Xi’an.!!The!factory!was!the!first!occupant!in!Lantian’s!first!industrial!park.!!!!

2. The!factory!produces!mineral!water!from!a!750!foot!well!dug!on!the!property!in!1997.!(That’s!about!1.5!times!the!height!of!the!Washington!Monument.)!The!well!is!carefully!constructed!and!the!casing!is!lined!with!cement!to!prevent!ground!water!pollution.!Water!is!pumped!into!large!stainless!steel!settling!tanks!where!it!is!filtered!and!mixed!with!ozone!to!kill!any!bacteria.!The!water!is!then!bottled!for!distribution.!!

!3. The!water!factory!sits!within!a!larger!factory!compound!operated!by!Aleba!

Soya.!The!Joint!Venture!agreement!called!for!the!Chinese!JV!partner,!Aleba!Soya,!to!contribute!7!mu!of!land!to!the!Joint!Venture!to!accommodate!the!water!factory!operation!(Exhibit!B).!!

!4. The!US!Joint!Venture!partner,!Aleba!Water!Company!agreed!to!contribute!

capital!to!develop!and!launch!the!business.!Aleba!Water!Company!is!based!in!Shreveport,!LA.!!

!5. The!Lantian!government!did!not!issue!land!certificates!to!any!operations!in!

the!industrial!park,!because!they!had!not!received!approval!for!the!park!from!provincial!authorities.!This!problem,!common!across!China,!arose!because!the!pace!of!industrial!development!was!taking!place!more!rapidly!than!changes!in!land!regulation.!(The!Central!government!launched!the!2d!All!China!Land!Survey!in!2008!to!cure!these!problems.)!

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6. In!2006,!the!JV!Chinese!partner,!Aleba!Soya,!ran!into!financial!problems,!and!a!criminal!gang,!led!by!former!deputy!police!chief,!Sun!Junhong,!attempted!to!step!into!the!shoes!of!Aleba!Soya!as!the!Chinese!partner!for!the!Joint!Venture.!Sun!Junhong!tried!to!bribe!our!Chinese!manager!to!sell!out!the!U.S.!investors!for!$1.!In!return,!Sun!Junhong!promised!our!Chinese!manager!500,000!RMB.!Our!manager!refused!and!reported!the!incident!to!the!JV!Board.!!

!7. Under!the!JV!agreement,!the!Chinese!partner,!Aleba!Soya,!was!required!to!

offer!its!interests!to!the!US!partner!(Article!19!of!the!JV!Agreement).!!Aleba!Soya!did!not!make!this!offer.!!!

!8. Aleba!Water!refused!to!acknowledge!the!transfer!of!Aleba!Soya’s!JV!interest!

to!Sun!Junhong!and!Runjia.!Under!the!terms!of!the!JV!agreement!(Article!67!of!the!JV!Agreement),!the!US!partner,!Aleba!Water,!sought!an!order!from!the!China!International!Economic!&!Trade!Arbitration!Commission!in!Bejing!to!compel!specific!performance.!!Aleba!Water!received!a!favorable!decision!in!2006.!!Aleba!Soya!may!not!assign!its!obligations!under!the!JV!without!the!written!consent!of!Aleba!Water!(Article!66!of!the!JV!Agreement).!Aleba!Water!has!never!approved!any!transfer!to!Runjia.!!Neither!Lantian!Government!nor!the!Xi’an!Government!have!approved!any!transfer,!either.!Without!the!approval!of!these!two!governments,!any!alleged!transfer!has!no!legal!standing.!!

!9. In!2006,!Sun!Junhong!began!interfering!with!the!operation!of!the!business!by!

periodically!locking!the!gates!to!the!factory!driveway.!!The!factory!manager!made!numerous!appeals!to!local!police!to!prevent!this!harassment.!The!Lantian!police!have!done!nothing.!!

!10. At!the!time!Sun!Junhong!began!interfering!in!the!JV!business,!the!business!

served!30,000!customers!with!14!retail!shops,!80!employees,!and!an!inventory!of!over!100,000!bottles.!The!Xi’an!government!rated!the!JV’s!water!as!the!highest!quality!mineral!water!in!Xi’an.!!!!!

!11. Instead!of!putting!Aleba!Soya’s!land!up!for!public!auction,!the!Land!Bureau!

arranged!a!private!sale!to!Runjia.!This!sale!included!Aleba!Water’s!property.!The!proceeds!of!the!land!sale,!about!1.8!million!RMB,!ended!up!in!the!Lantian!Land!Bureau,!not!the!Lantian!Financial!Bureau.!Zhao!Ji!Di,!the!head!of!the!Lantian!Land!Bureau,!then!wired!these!funds!away.!Zhao!Ji!Di!used!the!proceeds!of!this!sale!to!purchase!his!current!position!in!the!Xi’an!Land!Bureau.!Lantian!Communist!Party!Secretary,!Li!Yi,!confirmed!this!account.!!

!12. In!2008,!China!launched!the!All!China!Land!Survey!to!cure!the!problems!

created!by!out!of!date!land!regulations.!Through!a!perversion!of!the!Land!Survey!by!the!Lantian!government,!Runjia!acquired!Aleba!Soya’s!land!interest!with!an!illegal!land!transfer!sanctioned!by!the!Lantian!Land!Bureau.!Here’s!how!the!confiscation!took!place:!!

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!!

a. Under!the!Land!Survey,!all!existing!uses!were!supposed!to!be!documented!in!order!to!update!China’s!land!use!regulations.!The!State!Council!issued!an!order!prohibiting!the!fraudulent!preparation!of!documents!in!connection!with!the!Survey.!!!

b. Despite!repeated!requests!by!Aleba!Water!Company!to!be!included!in!the!Survey!as!the!registered!owner!of!7!mu!of!land,!the!Lantian!Land!Bureau!officials!refused!our!requests.!!

c. On!March!5,!2008,!the!Lantian!Land!Bureau!issued!an!internal!memorandum!to!review!the!transfer!of!property!from!Aleba!Soya!to!Runjia!(Exhibit!C).!!

d. On!March!28,!2008,!the!Lantian!Land!Bureau!issued!a!form!making!no!mention!of!Aleba!Water’s!continuing!occupancy!of!7!mu!of!land.!By!wiping!Aleba!Water’s!land!interest!clean,!the!form!indicated!that!Runjia!owns!all!of!Aleba!Soya’s!property,!including!Aleba!Water’s!7!mu!(Exhibit!D).!!

e. Despite!clear!evidence!to!the!contrary,!on!April!7,!2008,!the!Land!Bureau!and!Mayor!Li!Yi!certified!that!there!were!no!disputes!regarding!the!Aleba!Soya!property!and!that!the!property,!including!the!7!mu!of!land!on!which!the!water!factory!operated,!was!now!registered!under!Runjia.!!!

13. The!Lantian!Government!has!assigned!Vice!Mayor!Chen!Xiwen!to!handle!the!Aleba!controversy.!From!the!beginning!of!his!engagement!with!our!case,!Chen!Xiwen!has!consistently!advocated!the!position!of!Sun!Junhong!and!Runjia.!!He!supervised!the!construction!of!a!wall!that!completely!cut!off!access!of!the!factory!driveway!to!the!street.!He!has!repeatedly!misinformed!Xi’an!municipal!staff!that!the!Aleba!JV!is!a!“sham”!joint!venture!and!that!the!Aleba!Water!complaints!have!nothing!to!do!with!official!corruption.!Chen!argues!that!it!is!simply!a!dispute!between!private!parties!in!which!the!Lantian!government!has!no!role.!!!

14. Once!the!Lantian!Government’s!corrupt!officials!illegally!confiscated!and!sold!our!property!to!Runjia,!they!also!supervised!the!complete!blockage!of!our!factory!driveway!from!the!main!road.!This!blockade!included!paving!over!the!driveway!access!and!constructing!a!permanent!wall.!Once!this!complete!blockage!was!in!place,!our!business!collapsed.!The!JV!has!sold!off!its!fleet!of!vehicles,!eliminated!it!retail!shops,!and!dismissed!most!of!its!workers.!The!factory!now!sells!water!to!less!than!100!customers!in!a!relatively!small!geographic!area!around!the!factory.!!!!!

15. Sun!Junhong!and!his!gang!has!repeatedly!assaulted!Aleba!staff.!The!latest!assault!came!on!March!5,!2013.!Despite!regular!requests!for!protection,!the!Lantian!police!have!done!nothing!to!protect!Aleba!personnel!or!property.!!!

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16. After!Ambassador!Locke’s!engagement!in!this!issue,!we!were!able!to!arrange!a!meeting!with!Wang!De!An,!the!Chief!of!Staff!to!the!Mayor!of!Xi’an.!In!our!meeting!on!June!1,!2012,!we!made!five!demands:!!

!a. Remove!the!obstructions!to!our!factory!operation!and!protect!the!

safety!of!our!factory!staff;!!b. Register!Aleba!Water!under!the!2d!All!China!Land!Survey!in!

accordance!with!China’s!Land!Control!laws.!!c. Issue!a!land!certificate!to!the!Joint!Venture!to!cover!the!7!mu!of!land!

on!which!we!have!been!operating!continuously!since!1998.!!d. Investigate!and!punish!officials,!including!Zhao!Ji!Di!and!Chen!Xiwen,!

who!have!been!responsible!for!falsifying!Land!Bureau!documents!in!violation!of!the!Sate!Council’s!Order!518!and!using!their!public!office!for!private!gain.!Former!Lantian!Communist!Party!Secretary!Li!Yi!reached!this!conclusion!in!his!investigation,!but!this!investigation!was!halted.!!

e. Compensate!the!Joint!Venture!and!Aleba!Water!for!the!loss!of!business!for!over!seven!years.!!

!17. !We!requested!action!in!thirty!days.!Wang!De!An!and!his!staff!requested!more!

time!to!resolve!the!issues!we!raised.!We!agreed!to!show!patience,!as!long!as!we!were!confident!that!action!was!being!taken.!!In!September,!the!Lantian!Government!reconnected!the!factory!driveway!to!the!street.!!!

18. On!February!21,!2013!–!8!months!after!the!June!meeting!–!the!Lantian!Government!removed!the!last!lock!on!the!factory!gates!to!provide!full!access!of!the!factory!to!the!road.!!!

!19. The!Xi’an!government!has!taken!no!steps!to!resolve!the!other!issues.!Despite!

their!promise!to!contact!our!China!representative!to!discuss!a!resolution,!they!failed!to!contact!our!representative.!!!

20. On!March!5,!Sun!Junhong’s!gang!assaulted!our!factory!manager!as!he!worked!to!repair!the!factory’s!door!to!the!driveway.!!

!Next!Steps!!We!request!the!Embassy’s!assistance!in!the!following!ways:!!!

1. We!need!your!assistance!to!have!our!company!properly!registered!under!the!2008!All!China!Land!Survey.!This!request!follows!State!Council!Order!518!regarding!the!All!China!Land!Survey;!China!Ministry!of!Land!and!Resources!Order!45!regarding!the!All!China!Land!Survey;!and!Shaanxi!Provincial!Government!Document!34!regarding!the!All!China!Land!Survey.!!

! 5!

2. We!need!your!assistance!in!protecting!our!property!and!employees.!We!request!your!assistance!to!inform!the!Lantian!Police!of!their!obligation!to!protect!our!employees!and!property!according!to!international!law.!!!

3. We!would!like!your!assistance!in!filing!a!letter!of!complaint!against!Zhao!Ji!Di!to!the!Chinese!Communist!Party’s!Discipline!Committee!for!misusing!his!public!office!for!private!gain.!Zhao!Ji!Di’s!corruption!has!cost!us!over!five!years!of!business!losses,!as!well!as!imposing!great!losses!on!the!citizens!of!Lantian!County.!!

4. We!would!like!your!guidance!in!moving!this!issue!to!Washington.!We!are!interested!in!requesting!hearings!on!this!matter.!!

!!! !

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!!

! 7!

!!!

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ALEBA WATER

COMPANY

January 19, 2013

!Wang De An Chief of Staff Foreign Affairs Office Xi’an Municipal People's Government No. 109 Fengg Balu Weiyang District Xi’an, Peoples Republic of China !Dear Wang De An: !This letter registers my disappointment in the failure of your government to resolve the issues surrounding our Xi’an Aleba Water factory in Lantian County. Here is the situation: !1. Access to our factory remains blocked despite your assurances that this matter

would be resolved soon after our meeting last June. The side gate to our facto-ry remains locked by the gangsters and Lantian police have refused to open this gate. We are still making water deliveries through a hole in the brick wall we have arranged with a neighbor. We remain fearful that our factory person-nel will be assaulted or charged if we remove the lock. I have directed our fac-tory staff not to remove the lock. This lock was placed on our factory by the gangsters, and it should be removed by the legitimate government officals of the Xi’an government. The Lantian police are making no effort to resolve this problem of blocked access. Clearly, the Xi’an Government has no power over the Lantian police in this matter. !

2. You have failed in your commitment to me to contact our representative Wang Hui after our meeting. In our meeting, you made a clear commitment to me that you would contact Wang Hui to discuss the issues that I clearly laid out to you in our meeting. These demands include compensation to our joint venture for over five years of damages to our business. You have made no effort to follow through on your commitment to me.

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!3. Your government has made no progress in investigating and punishing corrupt

Lantian officials who have acted as your agents in confiscating our investor property. You have not contacted our attorneys to investigate what we have found and the evidence of illegal compensation and forged documents that we have uncovered. You insisted at our meeting that your government would inves-tigate our situation and follow Chinese law and regulations. Clearly, the Xi’an Government has failed to take this matter seriously, despite my efforts to demonstrate to your government that we could bring this case to the highest levels of the U.S. government. !

4. You have taken no action to provide us with a valid land certificate, a commit-ment that follows our Joint Venture contract. Issuing a land certifiate to our joint venture would require you to investigate the corruption in the Lantian County Land Bureau. Since I put you on notice of this corruption, your failure to meet your commitments to me and to investigate the Lantnd Bureau simply makes the Xi’an Government a co-conspirator to this corruption. !

I am preparing present our case to officials in Washington and Beijing. I had hoped that I could demonstrate to you that our case deserves immediate attention, because we can bring our case effectively to the highest levels of our government. Despite over six months, your government has not responded to our petitions for clear and immediate action. !In March, I will be traveling to Washington, Beijing and Xi’an to deliver my report on your government’s failure to resolve these issues. I will make clear the names of all the officials involved. I will present clear facts of the illegal confiscation of our property and your government’s failure to respond. We demand 1) a land certifi-cate that has been guaranteed to us under Chinese law and our Joint Venture con-tract; and 2) compensation for the damages we have suffered over five years by the inability of your government to follow Chinese law and regulations. !The confiscation of our property in Lantian County will not stand. !Sincerely,


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ALEBA WATER

COMPANY

January 19, 2013

!Wang De An Chief of Staff Foreign Affairs Office Xi’an Municipal People's Government No. 109 Fengg Balu Weiyang District Xi’an, Peoples Republic of China !Dear Wang De An: !This letter registers my disappointment in the failure of your government to resolve the issues surrounding our Xi’an Aleba Water factory in Lantian County. Here is the situation: !1. Access to our factory remains blocked despite your assurances that this matter

would be resolved soon after our meeting last June. The side gate to our facto-ry remains locked by the gangsters and Lantian police have refused to open this gate. We are still making water deliveries through a hole in the brick wall we have arranged with a neighbor. We remain fearful that our factory person-nel will be assaulted or charged if we remove the lock. I have directed our fac-tory staff not to remove the lock. This lock was placed on our factory by the gangsters, and it should be removed by the legitimate government officals of the Xi’an government. The Lantian police are making no effort to resolve this problem of blocked access. Clearly, the Xi’an Government has no power over the Lantian police in this matter. !

2. You have failed in your commitment to me to contact our representative Wang Hui after our meeting. In our meeting, you made a clear commitment to me that you would contact Wang Hui to discuss the issues that I clearly laid out to you in our meeting. These demands include compensation to our joint venture for over five years of damages to our business. You have made no effort to follow through on your commitment to me.

-" - 1

!3. Your government has made no progress in investigating and punishing corrupt

Lantian officials who have acted as your agents in confiscating our investor property. You have not contacted our attorneys to investigate what we have found and the evidence of illegal compensation and forged documents that we have uncovered. You insisted at our meeting that your government would inves-tigate our situation and follow Chinese law and regulations. Clearly, the Xi’an Government has failed to take this matter seriously, despite my efforts to demonstrate to your government that we could bring this case to the highest levels of the U.S. government. !

4. You have taken no action to provide us with a valid land certificate, a commit-ment that follows our Joint Venture contract. Issuing a land certifiate to our joint venture would require you to investigate the corruption in the Lantian County Land Bureau. Since I put you on notice of this corruption, your failure to meet your commitments to me and to investigate the Lantnd Bureau simply makes the Xi’an Government a co-conspirator to this corruption. !

I am preparing present our case to officials in Washington and Beijing. I had hoped that I could demonstrate to you that our case deserves immediate attention, because we can bring our case effectively to the highest levels of our government. Despite over six months, your government has not responded to our petitions for clear and immediate action. !In March, I will be traveling to Washington, Beijing and Xi’an to deliver my report on your government’s failure to resolve these issues. I will make clear the names of all the officials involved. I will present clear facts of the illegal confiscation of our property and your government’s failure to respond. We demand 1) a land certifi-cate that has been guaranteed to us under Chinese law and our Joint Venture con-tract; and 2) compensation for the damages we have suffered over five years by the inability of your government to follow Chinese law and regulations. !The confiscation of our property in Lantian County will not stand. !Sincerely,


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2012!Aleba Water

Correspondence

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ALEBA WATER COMPANY

June 21, 2012

Wang De An Chief of Staff Foreign Affairs Office Xi’an Municipal People's Government No. 109 Fengg Balu, Weiyang District Xi’an, Peoples Republic of China Dear Wang De An: Thank you and your staff for taking time to investigate the seizure of our property. I have learned this morning that the Lantian Industrial Park Management has opened the driveway and installed a gate. We are making progress. As you know from inspecting our property, the Sun Junhong gang piled tree trunks to obstruct our driveway and placed a lock on the gate between our driveway and our office. I enclose pictures clearly showing these obstructions. I took these pictures on June 2, 2012. Our factory manager tells me that he fears removing these obstructions without the assurance of police protection. He fears retaliation from Sun Junhong’s gang. I have instructed him not to make any attempt to remove these obstructions until we have assurance of police protections from the Xi’an government. We need your assurance that when we remove these obstructions, our staff will not be assaulted. This fear is real and justified. During one of my visits to our factory, a member of the criminal gang physically assaulted me. When I went to report this assault to the Lantian police station in the industrial park, the Lantian police ran away. I rec-orded this incident on video. I also reported this incident to Cheng Xiwen in my meeting with him in October 2010 in the Xi’an Mayor’s office. He promised to in-vestigate and punish the gang member who assaulted me. Nothing happened. As you know, Sun Junhong is the former deputy police chief in Lantian. The Lanti-an police are under his control. Police at the Lantian Wenji Road Police Station have refused to respond to our repeated requests for assistance for at least four years. They have never intervened to protect our property or our staff. The reason

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is simple. Sun Junhong’s gang has instilled fear throughout Lantian. Here is an ex-ample. In December 2010, there was a terrible incident in the main street of Lanti-an. A car knocked down a man on a bike. The bicyclist became very upset, and he blocked the car from driving away. He did not know, however, that a top member of Sun Junhong’s gang was a passenger in the car. The gangster in the car called over his mobile phone to his criminal thugs. Soon, about ten thugs showed up. They nearly beat the poor man to death. The man's wife knelt on the ground and begged the gangsters to stop, but they continued to beat her husband. All she could do was to hold her husband's head in her arms to protect his head. The gangsters continued to beat his body. More than 200 peo-ple surrounded the gangsters and looked on. They were afraid to act. Nobody dared to say anything. One retired worker from Lantian Power Supply Company shouted "Call 110!". The gang immediately turned on him and began beating him, as well. The police never showed up to intervene. Lantian County is a lawless place. The police will not protect us. Everybody in the County knows that Sun Junhong gangsters have very close relationship with local officials and that he controls the police. In our meeting on June 1, my first appeal to you was to insure the physical safety of our factory. Our investors and I owe a deep obligation to our Chinese staff to assure their physical protection. Wang De An, I ask you to have the Xi’an police to supervise the removal of these obstructions. Only then can we have assurance that the Chinese government will protect our staff from physical assaults. As I have told you many times, we have lost all respect and confidence in the Lantian Government. Only the Xi’an Gov-ernment can meet the obligations of the Chinese government under Chinese and international law to protect foreign investors and their staff in Lantian County.

Sincerely,

President Aleba Water Company, LLC

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June 19w, 2012

Wang De An Chief of Staff Foreign Affairs Office Xi’an Municipal People's Government No. 109 FengChengg Balu Weiyang District Xi’an, Peoples Republic of China Dear Wang De An: This letter is to keep you fully informed of the disturbing events taking place around our Aleba Water factory. The Failure to Remove the Barricade Constructed by the Lantian Gov-ernment Here are the facts:

1. Last week, Lantina Industrial Park Deputy Manager Zhang Ranjun and sev-eral members of his staff came to the factory to begin dismantling the wall that blocks our factory access. As I have made clear to you on a number of occasions, this driveway is part of the 7 mu of land on which our factory operates. We paid for the driveway, and we want it returned to our posses-sion with clear access to the highway.

2. As Zhang Ranjun set to work, a member of the Sun Junhong gang ap-peared and began arguing loudly with Zhang.

3. Zhang and his team stopped work. 4. Zhang spoke with our Aleba factory manager and indicated that he would

like to open an entrance on the other side of the factory. Our manager, un-der instructions from me, has refused to participate in any discussion about an alternative entrance to our factory. Our factory manager made clear to Zhang that the driveway is part of our initial investment and cannot be al-tered.

5. Zhang and his men left and did nothing.

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6. In the afternoon, Zhang returned. His men began taking away the brick that blocks access from our driveway to the roadway. He stopped and once again began to try to negotiate with our factory manager.

7. Zhang told our factory manager to inform Wang Hui that Zhang and his men would remove the obstruction to the factory but that Aleba had to pro-vide a door. According to Zhang, RUnjia is worried that thieves may enter their property without a door. Our factory manager made clear that Runjia removed our door. Our factory manager asked Zhang to request Runjia to return our door and return the property to the condition prior to the confis-cation.

8. Zhang refused this request. 9. Instead, Zhang posed an ultimatum to our factory manager: Either Aleba

replaces the door or he will create an opening on the other side of our of-fice building.

This ultimatum is unacceptable. We demand return of our property, including the door taken away when the wall was built, our free and clear access to the highway, and the driveway that pro-vides access for heavy trucks to move water out of our factory. We are not negotiating. We are asking you to follow Chinese laws and regula-tions and reverse the confiscation of U.S. investor property by the Lantian Gov-ernment. In our meeting on June 1, 2012, Cheng Xiwen clearly told us the he would have the blockades removed from our factory. Now, we are seeing the same game-playing from the Lantian Government. I can assure you this is no game. You are a high level government official, and I would hope that you would not play along with these games. We are quite serious that we will take this matter to Beijing and Washington if this game-playing continues. The Conspiracy of Vice Mayor Cheng Xiwen and Industrial Park Man-ager Mu Xifung Cheng Xiwen has been conspiring with Industrial Park Manager Mu Xifeng to con-fiscate our property and to frustrate every effort to return this property to U.S. in-

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vestors. We believe that a full investigation of Cheng’s and Mu’s conspiracy should be launched. Here are some additional facts. Cheng was the former Industrial Park manager. When Cheng was promoted to Vice Mayor, he selected Mu Xifeng as his replacement. Mu Xifeng personally su-pervised the building of the blockade and the confiscation of our property. He contracted this work to a construction company controlled by the Sun Junhong gang. We believe that they have been working with the criminal gang, led by Sun Jun-hong, to wash money for the criminal gang and converting public property to the private use of Runjia. Here is an example. Cheng and Mu illegally converted a piece of land in front of our factory. This buffer land belonged to the public. The main road was widened in 2008. Prior to construction, Cheng and Mu instructed Runjia to buy this land from local peasants for 50,000 RMB. Later, Mu purchased this land from Runjia at a far higher price. Although nobody knows for sure, we believe the price was about six times higher. The real issue, however, is the conversion of the public land in front of our factory (a section of the old 312 road and a drainage ditch) to private profit for the criminal gang. We know these facts because we when Lantian County widened the road, they took away the parking lot in front of our factory office building. We should have been compensated, but we never were. In Lantian County, the government works for the criminal gang and not to protect U.S. investors. In 2008, the criminal gang obstructed our driveway with cement pilings. We made several attempts to have the police clear these pilings. When I went to the police station to complain about these pilings and to report an assault on me by a mem-ber of the criminal gang, the police simply ran away. I have this incident on video. We later learned that Mu Xifeng had instructed the police not to interfere. In other words, the Lantian Government was acting to confiscate our land and protect the interests of the criminal gang.

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These official acts by the Lantian Government have destroyed our business. We fully expect that our property will be returned to us by our intervention. We also expect to discuss with you how the Lantian Government will compensate us for the destruction of our business. We have lost thousands of customers and a strong re-tail network in Xi’an. We have lost millions of RMB in revenue while the Lantian Government has been busy confiscating our property, ignoring Chinese law and regulations, and promoting the interests of a criminal gang over the interests of the people of Lantian. It is time for this criminal conduct to cease and for the Lantian Government officials to become accountable under Chinese law and regulations. Sincerely,


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ALEBA WATER COMPANY

June 9, 2012

Wang De An Chief of Staff Foreign Affairs Office Xi’an Municipal People's Government No. 109 Fengcheng Balu Weiyang District Xi’an, Peoples Republic of China Dear Wang De An: Thank you for taking time to investigate the seizure of our property. I am writing this letter to express some continuing concerns. Specifically, I am concerned about your continued reliance on the Lantian Government and Vice Mayor Chen Xiwen to resolve this confiscation. These officials have proven themselves unable to re-spond. We believe they are close associates of Suen Junhong’s criminal gang and the gang’s affiliated company, Runjia Real Estate Development. The Lantian Government’s position in this matter is absurd on its face. They argue that this matter is a controversy between Aleba and Runjia. Nothing could be fur-ther from the truth. Runjia has no place in our joint venture. We started making complaints to the Xi’an government more than three years ago. We have been more than patient it trying to resolve this matter according to Chinese law and regulations. The Lantian Party Committee made a decision two years ago that the the Lantian Government must solve this confiscation problem according to Chinese law and the blockade of our factory -- guided by Runjia, di-rected by Lantian’s Industrial Park Manager, and fully supported by Chen Xiwen -- should be immediately lifted.

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The Lantian Party Committee directed Deputy Mayor Chen Xiwen to remove the blockade. I personally met Chen Xiwen in the Xi’an mayor’s office in October 2010 and requested him to remove the blockade of our factory. Chen Xiwen promised me that the obstructions to our factory would be taken away. They re-main in place. Our factory remains completely blockaded by Runjia and the Lanti-an Government. The Lantian County Government is now completely compromised and fully sup-portive of Runjia’s confiscation of our property. The Lantian County Government has converted public land to private use by violating China’s land mangement laws. The Lantian Party Secretary Li Yi recognized this fact. Li Yi clearly stated to Aleba’s representatives that former Lantian Land Bureau Director Zhao Jidi mis-used public power for private gains. Among other violations, Zhao Jidi violated the China’s land management law by not putting pubic land into public auction. He transferred public land to Runjia, including the property that belongs to the Joint Venture, without following China’s laws. Chen Xiwen has acted consistently to protect and hide this illegal transfer. In doing making this illegal transfer, Zhao Jidi falsified no fewer than seven legal documents relating to the Chinese Land Survey in the illegal confiscation of our property, according to our Chinese lawyers. Our letter in Chinese that we deliv-ered on June 1 clearly outlines these falsifications. He refused our repeated request for us to document the continuous operation of our factory for over ten years under the Second All China Land Survey. By deny-ing our applications and turning this property over to Runjia, Zhao Jidi violated regulations of the State Council. At the same time, both the Party Committee’s decision and the Communist Party Secretary have decided to that the obstructions surrounding our factory -- obstruc-

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tions put in place by joint action of the Lantian County Government and Runjia -- should be removed, but they remain in place. As further evidence of this conspiracy between Chen Xiwen, the Lantian Govern-ment and Runjia, the Lantian Land Bureau has issued an illegal license to Runjia covering our property. They now insist that the Lantian Government cannot change its decision to revoke the issuance of this illegal certificate. Zhao Jidi has now become the Land Bureau Director of Feng Wei New District in Xi’an. His official position is now much higher than Lantian officials. Further, Lanti-an Land Bureau, since 2009, now reports to the Xi’an Land Bureau. The Lantian Government no longer has jurisdiction to reverse the illegal issuance of the land certificate covering our property. Finally, to cover their crimes, the Lantian Land Bureau has attempted to hide be-hind a Middle Court decision issued in 2005. The original decision by a three judge panel focused only on the transfer of factory assets, not on land. The execu-tive judge, in charge of executing the decision, abused his power by illegally ex-panding the three judge decision to cover a land transfer. Using this decision as a justification for the confiscation of our property is again the misuse of public power by the Lantian Land Bureau. As I have indicated to you in our meeting, we strongly recommend you will inves-tigate these miscarriages of Chinese law and the confiscation of U.S. investor property by the Lantian Government. We categorically reject any argument that Runjia is our “partner”. We also reject Chen Xiwen’s continuing involvement in this matter. His past actions clearly indicate that he is protecting the illegal actions of Zhao Jidi and the criminal conspiracy between the Lantian Government and Run-jia.

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Criminal behavior has overtaken Lantian County and undermined the protections that U.S. investors expect to receive under Chinese law. If you are not prepared to act, I will, as I indicated to you, take this matter directly to Beijing and Washing-ton in a matter of weeks, not months or years. We will continue to seek Chinese officials willing to combat this corruption by following Chinese law and regula-tions. Sincerely,


May 29, 2012

Honorable Dong JunMayorWang De An Chief of StaffForeign Affairs OfficeXi’an Municipal People's GovernmentNo. 109 Fengcheng BaluWeiyang DistrictXi’an, Peoples Republic of China

Dear Sirs:

Attached is a letter in Chinese which I wish you to read. This letter supplements my Chinese letter to you which goes into far more detail.

I am here to request a meeting to settle an important matter: the confiscation of U.S. investor property in the Xi’an Aleba Water Factory in Lantian County. We have operated continuously on this property since the formation of our Joint Ven-ture in 1998.

We have learned that Mr. Wang De An is in charge of solving this issue, and we thank the Xi’an government for making this arrangement. We also want to thank Mr. Wang De An for coming to our factory for a site inspection. We place great hope that we can now resolve this matter.

We started making complaints to the Xi’an government more than three years ago. Former Mayor Chen Baogen gave clear instructions to the Lantian leaders to solve this matter according to Chinese Joint Venture Law and other laws. The Lan-tian Party Committee made a decision two years ago that the the Lantian Govern-ment must solve this confiscation problem according to Chinese law and the blockade of our factory should be immediately lifted.

-1-

333 Texas StreetShreveport, LA 71101

T 216-650-7267

ALEBA WATER

COMPANY

The Lantian Party Committee requested Deputy Mayor Chen Xiwen to remove the blockade. I personally met Chen Xiwen in the Xi’an mayor’s office in October 2010 and requested him to remove the blockade of our factory. Chen Xiwen promised me that the obstructions to our factory would be taken away. They re-main in place. Our factory remains completely blockaded.

The Lantian Party Secretary Li Yi clearly stated that former Lantian Land Bureau Director Zhao Jidi misused public power for private gains. Among other violations, Zhao Jidi violated the China’s land management law by not putting pubic land into public auction.

He transferred public land to Runjia Real Estate Company, including the property that belongs to the Joint Venture. In doing so, he falsified no fewer than seven le-gal documents relating to the Chinese Land Survey in the illegal confiscation of our property. Our letter in Chinese clearly outlines these falsifications. He refused our repeated request for us to document legally the continuous operation of our fac-tory for over ten years.

At the same time, both the Party Committee’s decision and the Communist Party Secretary have decided to that the obstructions should be removed, but they re-main in place. We have now been informed by the Lantian Government that Run-jia Construction Company now has a land certificate covering our property. We have been instructed that the Lantian Government cannot change its decision to revoke the issuance of this illegal certificate.

Zhao Jidi has now become the Land Bureau Director of Feng Wei New District in Xi’an. His official position is now much higher than Lantian officials. Further, Lan-tian Land Bureau, since 2009, now reports to the Xi’an Land Bureau. The Lantian Government no longer has jurisdiction to reverse the illegal issuance of the land certificate covering our property.

We have learned from our sources that Zhao Jidi took money from the land fee paid by Runjia Construction and purchased his current government position. He should have sent this money to the Lantian Financial Bureau.

In light of the evidence we have compiled against Zhao Jidi, Lantian Party Secre-tary Li Yi further requested us to submit a letter to the public prosecutor to investi-gate this matter of Zhao Jidi’s public misconduct. We wrote this complaint letter and handed it to Chen Xiwen, Deputy Mayor of Lantian. We have received no re-sponse.

Finally, to cover their crimes, the Lantian Land Bureau has attempted to hide be-hind a Middle Court decision issued in 2005. The original decision by a three

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judge panel focused only on the transfer of factory assets, not on land. The execu-tive judge, in charge of executing the decision, abused his power by illegally ex-panding the three judge decision to cover a land transfer. Using this decision as a justification for the confiscation of our property is again the misuse of public power by the Lantian Land Bureau.

We strongly recommend you will investigate these miscarriages of Chinese law and the confiscation of U.S. investor property. We have no understanding how a legal joint venture in China can have its land confiscated in this way. The only an-swer is that criminal behavior has overtaken Lantian County and undermined the protections that U.S. investors expect to receive under Chinese law.

Sincerely,

PresidentAleba Water Company, LLC

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2011!Aleba Water

Correspondence

May 15, 2011

The Ministry of Public Security of the People's Republic of ChinaNo. 14, East Chang An StreetEast DistrictBeijing, Peoples Republic of China

Dear Sirs:

We make this complaint to your office under China's Criminal Law Article 280 and China Supreme Court Document (2000) Number 14, issued June 19, 2000.

This letter requests your investigation into an illegal confiscation of U.S. investor property that has taken place in Lantian County, Xi'an, Shaanxi Province. This ille-gal confiscation by a criminal conspiracy based in Lantian has cost U.S. investors over $2.2 million. The people of Lantian County have suffered additional losses from the illegal confiscation of public property.

The conspiracy involves a criminal gang, led by a former deputy police chief in Lantian County. This gang has has been operating within Lantian County since 2005 and confiscated over 17 factories for illegal -- and highly profitable -- con-version to residential use. The criminal gang actively colludes with corrupt local officials in the Lantian Land Bureau, the Lantian Industrial Commission and the Lan-tian Police Department.

The facts are as follows:

1. In 1997, at the invitation of Lantian Party Secretary Zhu Zhisheng, a group of investors formed Aleba Water Company, LLC, a Louisiana limited liability company, to make an investment in a joint venture in Lantian County. Zhu Zhiseng requested help to develop the water resources of Lantian County for the benefit of the people of Lantian and Xi’an. Zhu Zhiseng is now Vice Mayor of Xi’an.

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T 216-650-7267

ALEBA WATER COMPANY

2. In 1998, the U.S. investors formed a joint venture company, Xi'an Aleba Water Company,. The joint venture factory has been in continuous operation since 1998. The U.S. investors own __% of the Joint Venture company. By 2005, the Joint Venture operated with eight retail shops in Xi’an and over 30,000 customers.

2. The Joint Venture operates on 7 mu of land inside an abandoned soy bean factory. The abandoned soybean factory occupies 40 mu of land in a prime location within the Lantian Industrial Park. Our address: Xi’an Aleba Water Company, Lantian Industrial Park, Lantian. Our telephone: 029-82725667.

3. Our water factory is separated from the abandoned soybean factory by walls. Within the Joint Venture compound, we operate a well that produces the finest quality mineral water available in the local market, according to Xi’an government officials. We treat and bottle this water in a modern fac-tory with U.S. built filling equipment.

4. At the time the joint venture formed, the soybean factory was controlled by Zeng Zhong. As part of the initial investment in the joint venture, Zeng Zhong agreed to lease 7 mu of the 40 mu to the Joint Venture. Despite re-peated requests and a decision in favor of U.S. investors by the Arbitration Commission in Beijing, Zeng Zhong never contributed a valid land certificate to the Joint Venture.

5. The Joint Venture filed all of the required approvals for registration prior to beginning operation in 1998. These approvals are on file with the Xi'an government.

6. In April 2005, Zeng Zhong fell into serious financial difficulty with a local bank. He transferred all of his interest in the soybean factory to Han Minxia, a local housewife. He also allegedly transferred his interest in the Joint Venture to Han Minxia. This transfer violated the terms of the Joint Ven-ture agreement which requires prior approval of U.S. investors. The U.S. in-vestors have never recognized Han Minxia or her successors as members of the Joint Venture.

7. In May 2005, Han Minxia transferred her interest in the soybean factory to Languan Construction Company, Ltd. In this transfer, there is no mention of a transfer of Zeng Zhong's Joint Venture interest to Languan Construction Company.

8. In 2007, Languan Construction Company, Ltd. transferred its interest in the soybean factory, allegedly including an interest in the Joint Venture, to Run-

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jia Real Estate Company, Ltd. Both Languan and Runjia are controlled by criminal elements associated with a former deputy police chief in Lantian.

9. Runjia then began a campaign of physical intimidation gainst the Joint Ven-ture and its employees. They locked the doors to our factory and placed cement pilings on the driveway, blocking our access to the main highway. They threatened our employees and assaulted both employees and me. We have been forced to gain access to our factory compound by opening a small hole in the wall separating our property from our neighbor, who has steadfastly supported our factory and refused to join in the criminal con-spiracy.

10. In April 2008, Runjia Real Estate Company applied to the Lantian Land Bu-reau for a land certificate that would wipe out the interest of the Joint Ven-ture in the 7 mu of land.

11. To obtain this illegal certificate, Runjia collaborated with Lantian Land Own-ership Section Chief Tang Anyi and other officials to falsify facts and docu-ments to justify the issuance of this illegal certificate. In issuing this certifi-cate, officials in the Lantina Land Bureau have ignored China's Joint Venture Law, Land Transaction Regulations of the Shanxi Government, and China State Council's Order no. 815 on the Second All China Land Survey.

12. Here is an example of how Lantian officials have fraudulently prepared offi-cial documents. The issuance of a land certificate requires the signatures of adjoining property owners to insure that there are no disputes. The fraudu-lent land certificate includes the signature of Cao Jingyi. No such person ex-ists. The adjoining property owner to the Joint Venture is Lantian Sanlizhen Construction Company. Its legal representative, the person authorized to sign for the company, is Wei Xuanmin.

13. Despite repeated appeals to the Lantian Land Bureau by U.S. investors and our Chinese lawyers, officials in the land bureau refuse to recognize our le-gal rights under the Second All China Land Survey. With the issuance of an illegal land certificate, these officials have confiscated our property. Our damages now exceed $2.2 million.

14. This confiscation also robs the people of Lantian. With Zeng Zhong's demise, the rights to the soybean factory should have reverted to the Lantian Gov-ernment. Zeng Zhong had no authority, in the view of our Chinese lawyers, to transfer this property to a third party.

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We request that you investigate these crimes. The Joint Venture should be able to continue operating on our 7 mu of land with a proper land certificate. The people of Lantian County should receive the benefit of the 33 mu of land that Zeng Zhong abandoned. The criminals who have engineered this conspiracy to enrich them-selves should be sent to jail.

Xi’an Mayor is well aware of our case, and Lantian Communist Party Secretary Li Yi has expressed his support. Nevertheless, the local officials in the Lantian Land Bureau openly disregard the authority of the Chinese government and its laws.

Sincerely,


Page 4

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ALEBA WATER COMPANY

June 5, 2011

Mr. Cao Jianming, Supreme Procurator

The Supreme Procuratorate of the People's Republic of China No. 147, Beiheyan, East Chang An Street East District Beijing, Peoples Republic of China Dear Sirs:

We make this complaint to your office under China's Criminal Law Ar-ticle 397 , Article 398, China Supreme Court Document (2000) Number 14, issued June 19, 2000 and China State Council�s No.518 Order on All China Second Land Survey, Ministry of Land and Natural Recourse of China�s Order No.45 on All China Second Land Survey and Regulations on Land Transaction issued by Shaanxi Provincial Government.

This letter requests your investigation into an illegal transfer of public land and US investors�land , and the confiscation of U.S. investor property that has taken place in Lantian County, Xi'an, Shaanxi Province. This illegal land deal and confis-cation by a criminal conspiracy based in Lantian has cost loss to U.S. investors over $2.2 million. The people of Lantian County have suffered additional losses from the illegal transfer of public property.

The conspiracy involves three government officials of Lantian County, Xian, Shaanxi Province. They are: Li Yi, former Lantian Mayor, Zhao Jidi, former Lantian Land Bureau Director and Tang Anyi, Land Own-ership Section Chief of Lantian Land Bureau.These three officials col-ludes with local gangsters in a criminal act that has stolen 1) 33 mu

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of public land and 7 mu of our JV land . Both public land and our JV land have been transferred from one party to second, to a third, then to a fourth party based on an out-dated court executive decision without paying any land fee and land tax.2) government documents in Second All China Land Survey were falsif ied to move public land and our JV land to Runjia Real Estate Company controlled by local gan group. This criminal act brings great losses to Lantian govern-ment and US investors.


1. In 1997, at the invitation of Lantian Party Secretary Zhu Zhisheng, a group of investors formed Aleba Water Company, LLC, a Louisiana limited liability company, to make an investment in a joint venture in Lantian County. Zhu Zhiseng requested help to develop the water resources of Lantian County for the benefit of the people of Lantian and Xi’an. Zhu Zhiseng is now Vice Mayor of Xi’an.

2. In 1998, the U.S. investors formed a joint venture company, Xi'an Aleba Water Company,. The joint venture factory has been in continuous opera-tion since 1998. The U.S. investors own _78_% of the Joint Venture compa-ny. By 2005, the Joint Venture operated with eight retail shops in Xi’an and over 30,000 customers.

2. The Joint Venture operates on 7 mu of land contributed by a local soy bean factory(22%). The soybean factory occupies 40 mu of land in a prime loca-tion within the Lantian Industrial Park. Our address: Xi’an Aleba Water Company, Lantian Industrial Park, Lantian. Our telephone: 029-82725667.

3. Our water factory is separated from the soybean factory by walls. Within the Joint Venture compound, we operate a well that produces the finest quality mineral water available in the local market, according to Xi’an gov-

Page 3

ernment officials. We treat and bottle this water in a modern factory with U.S. built filling equipment.

4. At the time the joint venture formed, the soybean factory was controlled by Zeng Zhong who is our JV partner and Vice-chairman of Board of Directors. As part of the initial investment in the joint venture, Zeng Zhong agreed to contribute 7 mu of the 40 mu to the Joint Venture. Despite repeated requests and a decision in favor of U.S. investors by the Arbitration Commission in Beijing, Zeng Zhong never contributed a valid land certificate to the Joint Venture. This is due to a fact that Lantian Industrial Park had nev-er been recognized by Shaanxi Government and none of the factories ,companies or residential areas in the park has ob-tained land certif icate until 2008 when All China Second Land Survey started.

5. The Joint Venture filed all of the required approvals for registration prior to beginning operation in 1998. These approvals are on file with the Xi'an government.

6. In April 2005, Zeng Zhong fell into serious financial difficulty with a local bank. He transferred all of his interest in the soybean factory to Han Minxia, a local housewife. He also allegedly transferred his interest in the Joint Ven-ture to Han Minxia. Zeng Zhong- Han Minxia transferring agreement was allegedly approved by a Xi�an Middle Court Executive Decision. The se-cond page of the decision clearly states: The Water JV is legal and can con-tinue to operate. This transfer violated the terms of the Joint Venture agree-ment which requires prior approval of U.S. investors. The U.S. investors have never recognized Han Minxia or her successors as members of the Joint Venture. In fact Han never comes to our JV to claim her interest.

7. In May 2005, Han Minxia transferred her interest in the soybean factory to Languan Construction Company, Ltd. In this transfer, there is no men-

Page 4

t ion of a transfer of Zeng Zhong's Joint Venture interest to Lan-guan Construction Company.

8. In 2007, Languan Construction Company, Ltd. transferred its interest in the soybean factory, allegedly including an interest in the Joint Venture, to Run-jia Real Estate Company, Ltd. Both Languan and Runjia are controlled by the same criminal elements associated with a former deputy police chief Sun Junhong in Lantian.

9. Runjia then began a campaign of physical intimidation against the Joint Ven-ture and its employees. They locked the doors to our factory and placed cement pilings on the driveway, blocking our access to the main highway. They threatened our employees and assaulted both employees and me. We have been forced to gain access to our factory compound by opening a small hole in the wall separating our property from our neighbor, who has steadfastly supported our factory and refused to join in the criminal conspir-acy.

10. In April 2008, Runjia Real Estate Company applied to the Lantian Land Bu-reau for a land certificate that would wipe out the interest of the Joint Ven-ture in the 7 mu of land.

11. To obtain this i l legal certif icate, Runjia collaborated with Lantian Land Ownership Section Chief Tang Anyi and other officials to falsify facts and documents to justify the issuance of this i l legal certif icate. In issuing this certif icate, officials in the Lantina Land Bureau have ignored China's Joint Venture Law, Land Transac-tion Regulations of the Shanxi Government, and China State Council 's Order no. 518 on the Second All China Land Survey and China�s Criminal Law Article 228. Article 397 and Article 398. They used a Xi�an Middle Court Executive Decision as an excuse for their criminal act. This decision was made in April

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2005. It was valid only for 30 days. But Li Yi, Zhao Jidi and Tang Anyi used it in April 2008, three years after the decision became out of legal force. These three officials completely neg-elect that fact that this land has never been paid the land fee or land tax by either transferring party. They derelicted their duties on purpose.

12. Here is an example of how Lantian officials have fraudulently prepared offi-cial documents. The issuance of a land certificate requires the signatures of adjoining property owners to insure that there are no disputes. The fraudu-lent land certificate includes the signature of Cao Jingyi. No such person ex-ists. The adjoining property owner to the Joint Venture is Lantian Sanlizhen Construction Company. Its legal representative, the person authorized to sign for the company, is Wei Xuanmin. Another example is: a Xi�an Middle Court Executive decision was made in April ,2005 fro Han Minxia but Lanti-an land officials used it as a prove in 2008 to issue a land certificate for Runjia. This court decision had only one month legal effect according to Chi-na�s land laws and land regulations. Land was transferred from Zeng Zhong to Han Minxia, from Han Minxia to Languan, from Languan to Runjia with no land certif icate and paying no land fees or tax at each transfer. Tang Anyi falsified all necessary documents, Zhao Jidi approved it and Li Yi finalized the ap-proval process. They helped Runjia Rea Estate Company, on purpose,in stealing public property and our US investors proper-ty, causing mill ions of loss to Lantian people and over two mil-l ion loss to our US investors.

13. Despite repeated appeals to the Lantian Land Bureau by U.S. investors and our Chinese lawyers, officials in the land bureau refuse to recognize our le-gal rights under the Second All China Land Survey. They refuse to have our 10 year old Aleba Water JV registered. With the issuance of an illegal land

Page 6

certificate to Runjia, these officials have confiscated our property. Our damages now exceed $2.2 million.

We request that you investigate these crimes. We have all evidence in our Chinese lawyers� office. Please contact our manager Wang Hui and Dai Xiaofeng for in-vestigation. 029-82725667 and respond to me when you receive this complaint. A few local officials in the Lantian Land Bureau openly disregard the authority of the Chinese government and its laws, misuse public powers. Li Yi, the Mayor of Lantian( Now Fist Party Secretary of Lantian Party Committee) has committed a crime of Dereliction of Duty Sincerely,



T 216-650-7267

ALEBA WATER COMPANY

June 5, 2011

Mr. Cao Jianming, Procurator-GeneralThe Supreme Procuratorate of the People's Republic of ChinaNo. 147, Beiheyan, East Chang An StreetEast DistrictBeijing, Peoples Republic of China

Honorable Cao Jianming:

We make this complaint to your office under China's Criminal Law Article 397, Arti-cle 398, China Supreme Court Document (2000) Number 14, issued June 19, 2000 and China State Council’s No.518 Order on All China Second Land Survey, Ministry of Land and Natural Recourse of China’s Order No.45 on All China Second Land Sur-vey and Regulations on Land Transaction issued by Shaanxi Provincial Government.

This letter requests your investigation into an illegal transfer of public land and U.S. investors’ land , and the confiscation of U.S. investor property that has taken place in Lantian County, Xi'an, Shaanxi Province. This illegal land deal and confiscation by a criminal conspiracy based in Lantian has resulted in losses to U.S. investors of over $2.2 million. The people of Lantian County have suffered additional losses from the illegal transfer of public property into criminal hands.

The conspiracy involves three government officials of Lantian County, Xian, Shaanxi Province. They are: Li Yi, former Lantian Mayor, Zhao Jidi, former Lantian Land Bu-reau Director and Tang Anyi, Land Ownership Section Chief of Lantian Land Bureau. These three officials colluded with local gangsters in a criminal conspiracy:

• To steal 33 mu of public land and 7 mu of our Joint Venture land. Both public land and our JV land have been transferred from one party to second, to a third, then to a fourth party, based on an out-dated court executive decision. These transfers have taken place without paying any land fees and land taxes.

• To falsify government documents in the Second All China Land Survey to move public land and our Joint Venture land to Runjia Real Estate Company, an entity controlled by the criminal gang operating in Lantian. This criminal

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act of falsifying public documents has generated serious financial losses to the Lantian government and U.S. investors.


1. In 1997, at the invitation of Lantian Party Secretary Zhu Zhisheng, a group of U.S. investors formed Aleba Water Company, LLC, a Louisiana limited liability company, to make an investment in a joint venture in Lantian County. Zhu Zhis-eng requested help to develop the water resources of Lantian County for the benefit of the people of Lantian and Xi’an. Zhu Zhiseng is now Vice Mayor of Xi’an.

2. In 1998, the U.S. investors formed a joint venture company, Xi'an Aleba Water Company. The joint venture factory has been in continuous operation since 1998. The U.S. investors own 78% of the Joint Venture company. By 2005, the Joint Venture operated with eight retail shops in Xi’an and over 30,000 custom-ers.

2. The Joint Venture operates on 7 mu of land contributed by a local soy bean fac-tory (22%). The soybean factory occupies 40 mu of land in a prime location within the Lantian Industrial Park. Our address: Xi’an Aleba Water Company, Lantian Industrial Park, Lantian. Our telephone: 029-82725667.

3. Our water factory is separated from the soybean factory by walls. Within the Joint Venture compound, we operate a well that produces the finest quality min-eral water available in the local market, according to Xi’an government officials. We treat and bottle this water in a modern factory with U.S. built filling equip-ment.

4. At the time the joint venture formed, the soybean factory was controlled by Zeng Zhong who is our JV partner and Vice-chairman of Board of Directors. As part of the initial investment in the joint venture, Zeng Zhong agreed to contribute 7 mu of the 40 mu to the Joint Venture. Despite repeated requests and a decision in favor of U.S. investors by the Arbitration Commission in Beijing, Zeng Zhong never contributed a valid land certificate to the Joint Venture. This lapse was due to a fact that Lantian Industrial Park had never been recognized by Shaanxi

Page 2

Government. None of the factories, companies or residential areas in the park had obtained land certificate until 2008 when All China Second Land Survey started.

5. The Joint Venture filed all of the required approvals for registration prior to be-ginning operation in 1998. These approvals are on file with the Xi'an govern-ment.

6. In April 2005, Zeng Zhong fell into serious financial difficulty with a local bank. He transferred all of his interest in the soybean factory to Han Minxia, a local housewife. He also allegedly transferred his interest in the Joint Venture to Han Minxia. The transfer agreement between Zeng Zhong and Han Minxia was al-legedly approved by a Xi’an Middle Court Executive Decision. The second page of the decision clearly states: “The Water JV is legal and can continue to oper-ate.” This transfer violated the terms of the Joint Venture agreement, which re-quires prior approval of U.S. investors. The U.S. investors have never recognized Han Minxia or her successors as members of the Joint Venture. In fact, Han never presented herself to the Joint Venture Board to claim her interest.

3. In May 2005, Han Minxia transferred her interest in the soybean factory to Lan-guan Construction Company, Ltd. In this transfer, there is no mention of a trans-fer of Zeng Zhong's Joint Venture interest to Languan Construction Company.

7. In 2007, Languan Construction Company, Ltd. transferred its interest in the soy-bean factory, allegedly including an interest in the Joint Venture, to Runjia Real Estate Company, Ltd. Both Languan and Runjia are controlled by an organized criminal gang led by a former deputy police chief in Lantian, Sun Junhong.

8. Runjia then began a campaign of physical intimidation against the Joint Venture and its employees. They locked the doors to our factory and placed cement pil-ings on the driveway, blocking our access to the main highway. They threatened our employees and assaulted both employees and me. We have been forced to gain access to our factory compound by opening a small hole in the wall sepa-rating our property from our neighbor, who has steadfastly supported our factory and refused to join in the criminal conspiracy.

Page 3

9. In April 2008, Runjia Real Estate Company applied to the Lantian Land Bureau for a land certificate that would wipe out the interest of the Joint Venture in the 7 mu of land.

10. To obtain this illegal certificate, Runjia collaborated with Lantian Land Owner-ship Section Chief Tang Anyi and other officials to falsify facts and documents to justify the issuance of this illegal certificate. In issuing this certificate, offi-cials in the Lantian Land Bureau ignored China's Joint Venture Law, Land Trans-action Regulations of the Shanxi Government, and China State Council's Order no. 518 on the Second All China Land Survey and China’s Criminal Law Article 228. Article 397 and Article 398. They used a Xi’an Middle Court Executive De-cision as an excuse for their criminal acts. This decision was made in April 2005. It was valid only for 30 days. But Li Yi, Zhao Jidi and Tang Anyi used this deci-sion in April 2008, three years after the decision expired.

11. These officials also participated in the falsification of public documents related to the Second All China Land Survey conducted in 2008. The issuance of a land certificate requires the signatures of adjoining property owners to insure that there are no disputes. The fraudulent land certificate includes the signature of Cao Jingyi. No such person exists. The adjoining property owner to the Joint Venture is Lantian Sanlizhen Construction Company. Its legal representative, the person authorized to sign for the company, is Wei Xuanmin.

12. These officials also participated in defrauding the people of Lantian County of rightful land fees and lad taxes. Land was transferred from Zeng Zhong to Han Minxia, from Han Minxia to Languan, from Languan to Runjia with no land cer-tificate. These transfers involved no payment of land fees or taxes at each trans-fer.

4. Tang Anyi falsified all necessary documents for these illegal land transfers. Zhao Jidi approved these transfers, and Li Yi finalized the approval process. They knowingly assisted Runjia Real Estate Company in stealing both 33 mu of public property and 7 mu of our Joint Venture property. These illegal acts have caused millions of RMB in losses to Lantian people and over $2 million in losses to U.S. investors.

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13. Despite repeated appeals to the Lantian Land Bureau by U.S. investors and our Chinese lawyers, officials in the Land Bureau refuse to recognize our legal rights under the Second All China Land Survey. They refuse to issue a land certificate to our legally registered joint venture, that has been in continuous operation in the same location since 1998. With the issuance of an illegal land certificate to Runjia, these officials have confiscated our property. Our damages now exceed $2.2 million.

We request that you investigate these criminal acts. We have compiled detailed evi-dence in our Chinese lawyers’ office. Please contact our manager Wang Hui and Dai Xiaofeng to initiate an investigation. 029-82725667. In addition, please respond to me when you receive this complaint.

A few local officials in the Lantian Land Bureau openly disregard the authority of the Chinese government and its laws and misused their public powers. Li Yi, the former Mayor of Lantian (now First Party Secretary of Lantian Party Committee) has committed a crime of Dereliction of Duty. We have detailed additional evidence -- including pic-tures, video, and audio recordings -- on our web site: http://www.xiancorruption.net

I look forward to hearing from you.

Sincerely,

President

Aleba Water Company, LLC

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http://www.xiancorruption.net

http://www.xiancorruption.net

March 6, 2011

Mr. Li YiCommunist Party SecretaryLantian, Shaanxi Province,PRC

Dear Mr. Li:

We have learned from Cheng Xiwen that you have made the following decisions on last year regarding the illegal seizure of our factory:

• The controversy over the seizure of our factory must be resolved according to Chi-nese law, rather than by illegal confiscations and fabricated "official" documents;

• Free access to our factory must be restored, and the cement pilings must be re-moved from our driveway (July 2010);

• You will provide your full support to restoring our factory to normal operations (Oc-tober 2010);

• Zhao Jidi , former land director of Lantian County, has committed a crime of misus-ing his public power for private gains in handling the land certificate issue govern-ing our factory property. His action have confiscated both Lantian Government property and U.S. investor property.

• As requested, I wrote a detailed letter to Mr. Miao Zhizhong, Mayor of Lantian. I enclose a copy of my January 20, 2011 letter.

Our US investors, whom I represent, were extremely encouraged by your actions. We thank you for your determination, and we have withheld our further actions in Washington DC, as Wang Hui has requested. We continue to hope that the illegal confiscation of our factory can be resolved by officials in Lantian County, according to Chinese law.

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T 216-650-7267

ALEBA WATER COMPANY

Sadly, our progress has stopped. More than one month has passed, and our factory conditions remained virtually unchanged. We are still unable to resume normal op-erations. The damage to our business has been extensive, and we have no oppor-tunity to recover these significant losses.

This letter to you represents yet another appeal for your intervention. I will speak frankly, because the time is long past where we can hide behind nice words. In my view, your future as a leader in China depends in large part on how well you can contain this controversy within the borders of Lantian County. That requires you to take firm action and to follow Chinese law.

Frankly, I have no faith in Chen Xiwen, the VIce Mayor, the official designated to re-solve our controversy. In my view, he has done little to follow your instructions. I met with him during my last visit to Xi'an, and, despite his assurances, he did nothing un-til you became involved in this controversy. Since that time, he clearly has not un-derstood that the goal we are seeking involves returning our factory to normal opera-tions and following Chinese law to establish proper land-use rights over our factory compound. We again ask you to follow the clear procedures of the 2008 China Land Survey.

By Chen Xiwen’s actions, I can easily make the judgment that he is the “Powerful Man” behind Suen Junhong's gangster group. I can also see quite clearly that Zhao Jidi committed a crime by illegally issuing a fraudulent land certificate to Runjia. Zhao Jidi issued this fraudulent certificate on the eve of his departure from Lantian County, clearly hoping to leave his illegal acts undiscovered and behind him.

Cheng Xiwen continues a pattern of protecting Zhao Jidi and other corrupt Lantian land use officials. Why is he doing that if he is not part of the criminal conspiracy that has gained control of Lantian County? This criminal conspiracy, by confiscating U.S. Investor property, has made it totally unsafe for foreign investors. It underscores that China’s Communist Party has no control over corrupt local officials.

Matters in Lantian are spinning out of control. There are credible rumors in Lantian that Sun Junhong's gangsters assaulted and beat the current Land Director Gao in his office not long before China's Spring Festival. I can believe these rumors, be-cause, if you will recall, these gangsters assaulted me as I walked down the factory driveway. I have shown this video in the United States to emphasize that in Lantian County, the rule of Chinese law has disappeared. As I have said many times, I hope you will restore Chinese law to Lantian County.

Our frustration, however, continues to build. Only the guidance from Wang Hui keeps me from making a full disclosure of our situation to the US Embassy in Beijing, the Chinese Embassy in Washington DC, and the relevant committees in the U.S. Con-gress.

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Your office director, Mr. Li Qiang, has argued needlessly with our factory director that we should go to Xi'an Middle Court to complain of the executive decision regarding our property. As a person trained in the law, I am very respectful of Chinese law. But in our case, Chinese law has broken down. We have established clear evidence the the Xi’an Middle Court has been compromised by the criminal gang that has seized control of Lantian County.

For over 20 years, China's Supreme Court and the Land Ministry have issued very careful regulations and guidance to establish clear procedures on the transfer of land. This guidance makes clear that when a court decision is made relating to land ownership, a copy of that court decision must be sent to the local land bureau within three months. The local land bureau is obligated to change the land ownership re-cords in accordance with the court's decision.

In our case, a court decision in our favor was made in April, 2005. No copy was sent to the Lantian Land Bureau, and, despite our appeals, the Lantian Land Bureau made no effort to conform land records governing our property to the court's deci-sion. The Lantian Land Bureau was totally unresponsive to our repeated appeals to follow Chinese law.

The time to conform Lantian Land Bureau records to the court decision has passed. Guidance by the Supreme Court and the Land Ministry make clear that a court deci-sion regarding land transfer must be completed by the local land bureau within three months of the court's decision. By failing to act in a timely fashion to our appeals, the Lantian Land Bureau has effectively undermined the court's decision.

More important, Zhao Jidi illegally issued a land certificate to Runjia on April 7, 2008, three years after the court decision. This transfer had no basis in Chinese law what-soever. Sadly, your office director Li Liqiang's analysis of Chinese law is completely wrong. We see his argument as yet another effort to defelect attention away from the corrupt conspiracy operating in Lantian County.

Let me be clear. We have no intention of going back to Xi'an Middle Court. The core corruption problem lies in Lantian, and without honest Lantian officials, we have no ability to follow Chinese law. We have no assurance that any court decision will be followed by corrupt Lantian officials. Ultimately, the responsibility for following Chi-nese law falls on your doorstep.

Some people around you are trying to protect you for a simple reason. Your chop appears on the approval document of the fraudulent land transfer to Runjia. We be-lieve that you are not responsible for this illegal transfer. We believe Zhao Jidi mis-used public power and your name chop, which, we believe, was kept in the offices of the Land Bureau.

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Thank you again for your previous support. We again appeal to you to conform our property to the regulations of the 2008 Second Land Survey. We appeal to you to punish local officials responsible for confiscating the property of the Chinese people and U.S. investors.

Sincerely yours,

Edward F. Morrison


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January 17, 2011

Mr. Miao ZhizhongMayor of Lantian governmentXi’an, Shaanxi Provionce,PRC

Dear Mr. Miao:

With this letter, we, the American investors in Xi’an Aleba Water Co. Ltd, submit to you our complaint letter concerning the confiscation of our property in Lantian by corrupt land bureau officials: Zhao Jidi (Lantian Bureau Director), Shao Zunchang (Deputy Director) and Tan Anyi (Land Ownership Section Chief).

Background

Our Aleba Water JV was established in 1998 with the approval of Lantian and Xi’an governments. You can easily find out our legal documents from your Local Tax Bu-reau. Further, both the Xi’an Middle Court and the Arbitration Commission in Beijing have recognized the legal status of our joint venture in their decisions.

On July 15, 2010, the Lantian Land Bureau sent me a letter informing and confirming to me that they have legally issued a land certificate to Runjia Real Estate Company on April 7,2008 over a piece of 40 mu land in Lantian County. This land includes 7 mu land that belongs to our joint venture.

In December 2010, our lawyers managed to get copies of land registration docu-ments from Lantian Land Bureau.

These documents show that Zaho Jidi, Shao Zunchang and Tang Anyi handled the approval process between late March 2008 and early April 2008. The issuance of the Runjia certificate took place on the eve of Zhao Jidi’s promotion to Xi’an Fengwei District as land bureau director.

In its letter to me, the Lantian Bureau explained they issued the certificate to Runjia based on a Xi’an government decision (1998-08) , a Xi’an Middle Court Executive


T 216-650-7267

ALEBA WATER COMPANY

Decision (227-1), and land transaction agreements between a number of parties. They did not mention the decision of the Lantian government on March 21, 2008 (2008-07) concerning this property.

The two government decisions -- the Lantian government decision on March 21, 2008 and the Xi’an Middle Court 227-1 Executive Decision -- clearly show that the 30 mu land has been approved for transfer to Aleba Soya.

Xi’an Middle Court Executive Decision 227-1 clearly shows this land has been trans-ferred for the benefit of Aleba Soya and Han Minxia. The decision has two pages. The second page clearly states: Aleba Water JV is legal and can continue its opera-tion.

Lantian Land Bureau’s corrupt officials have hidden these fact in its approval files.

Neither the Lantian government decision (2008-07) nor the Xi’an Middle Court Court Executive Decision mentions Runjia. Zhao Jidi , Saho Zunchang and Tang Anyi mis-used their public authority to help Runjia to get this land illegally.

We have following evidence to prove that.

Evidence supporting our complaint

In its land registration documents for the Runjia certificate, Tang Anyi wrote: “four ends are clear, no dispute over the land”. Shaco Zunchang agreed with Tang. Zhao Jidi approved the issuing of certificate to Runjia.

This statement is clearly at odds with the facts. Our joint venture has been operating in the same location for 10 years. The land officials never came to ask us if there is dispute over the land we occupy. We recognize no rights of Runjia over our land. The statement that Runjia has rights to the land without dispute represents a fabrica-tion of facts. This fabrication is clearly a deliberate conspiracy to benefit Runjia, a company controlled by local organized criminals.

During the Second All China Land Survey in 2008, land official Shao Zunhang and other staff refused to have our joint venture registered, despite the fact that we have operated legally on this land for over ten years. These corrupt officials put all our property under Runjia’s name. This action represents the second step of their con-spiracy. When asked about this, Tang Anyi said to our lawyer: “Lantian government’s approval of land certificate to Runjia took place before the start of Land Survey. The Aleba water JV was certainly not included in the survey.” They used an illegally is-sued and false land certificate to eliminate our ownership from the Second All China Land Survey.

In the Land Survey registration documents for Runjia,, the corrupt officials again fab-ricated the facts: “four ends are clear, there is no dispute from for neighbors.” They

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even created a false neighbor, Cao Jingyi, to sign on the documents. No such per-son exists.

Prior decisions under Chinese law have clearly established our rights to the land we occupy. Xi'an Middle Court Executive Decision 227-1 makes it very clearly that our Aleba Water joint venture is legally established. The China Arbitration Commission’s decision in 2006 also makes it clear that our joint venture has been legally estab-lished under Chinese law. The Arbitration Commission decision directs Zeng Zhong, Chairman of Aleba Soya Board to hand the land certificate to Water JV within 6 months. All these legal decisions recognize the legal status of our joint venture and our right to operate on our land.

The Lantian Land Bureau officials’ corrupt acts have violated China’s Land Law, JV Law, Criminal Law and No.5 Order of State Council Of China, and Shaanxi Provin-cial Government Regulations on Land Transactions (No. 39).

Without clear resolution quickly, the legal confiscation of our property by the Lantian Land Bureau will create a number of political problem internationally. We need to ex-plore the following question: Is this action of confiscation a China Central Govern-ment’s policy or a policy in Xi’an? Or, is this action the product of local corruption?

Currently, we believe the confiscation of our property represents a local corrupt con-spiracy. The Lantian Land Bureau has legally confiscated our investment by illegally misusing its public powers. Therefore, I request you, Mayor of Lantian, to investigate this issue and punish the corrupt Lantian Land Bureau officials in accordance with China’ relevant laws.

The Damages to our Joint Venture

The confiscation of our investment (RMB 6.5 million) has created large financial losses to us. In addition to our lost investment, we have been denied our operating revenues and profits. The total loss of operational revenue in next 20 years (2008-2028) will be over 100 million RMB. Our lost profit will be over 10 million RMB.

We require full compensation by the Lantian government, if you determined that the Lantian Land Bureau’s issuance of the Runjia land certificate is legal.

We also note that Zhao, Shao and Tang Anyi ‘s actions helped Runjia to avoid the payment of Land Tax and the Land Value Appreciation Tax. This public money is lost to the government. We leave you to investigate the full loss to the people of Lantian from these corrupt acts.

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We demand your government to deal with this corruption with a serious investiga-tion. We have received assurances that the International Association of Defense Counsel, an international lawyers group representing major U.S. corporations, have an interest in assisting us in this matter.

Sincerely yours,

Edward F. Morrison


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2010 and Prior Years!Aleba Water

Correspondence

1

333 Texas Street Shreveport, LA 71101 T 216-650-7267 [email protected] www.lantiancorruption.net

ALEBA WATER COMPANY

October 26, 2010 Honorable Chen Baogen �� Mayor Xi'an Municipal People's Government Xi’an Shaanxi Province, PRC Thank you for your attention to our dire situation in at our joint venture factory in Lan-tian County, Xi'an Aleba Water Company. We are still waiting for a resolution to the serious interference with our factory operation and the confiscation of our U.S. inves-tor property through a corrupt conspiracy in Lantian County.

Our factory remains blocked by a criminal gang, headed by Sun Junhong, a former Lantian Police Chief, aided and abetted by corrupt Lantian officials, in-cluding a deputy mayor of Lantian (hereafter referred to as “the Lantian crimi-nal conspiracy”). Further, there is no investigation of corrupt officials, despite overwhelming evidence that crimes have taken place. Specifically, these crimes in-clude:

1. Fraudulent land certificate issued by the Lantian Land Bureau.-- The Lantian criminal conspiracy has caused the Lantian Land Bureau to issue a fraudulent land certificate (“the fake certificate”) for land on which our factory is located. The Lantian criminal conspiracy has used this fraudulent land certificate as a pretext to evict us from our land. Our factory, producing mineral water, has been in continuous operation for the past ten years in this location.

The Lantian Land Office issued the fake certificate to Runjia Real Estate Co. Ltd (“Runjia”), an entity controlled by the Lantian criminal conspiracy. Runjia (a key member of the Lantian criminal conspiracy) has used the fake certificate to in-timidate us into leaving our property, including beating our factory manager. Lan-tian police officials have used this fake certificate as an excuse not to protect our people and property. One police official has told our factory manager that the fake certificate gives the Lantian criminals the right to tear down our factory at any time. Using this fake certificate as an excuse, the police have refused to come to help us when the criminals have sent gang members to block our drive-ways, lock our doors, and beat our staff.

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ALEBA WATER COMPANY

Lawyers representing our Joint Venture have examined a copy the fake certifi-cate. Our lawyers have not been able to examine the original of the fake certifi-cate. There is no original in the Land Bureau office.The fake certificate is clearly a fabrication for the following reasons:

• The fake certificate shows that the land was sold from public ownership di-rectly to Runjia. There is no record of a public auction related to this trans-fer. As you know, a public auction is required for the sale of any public land. There is no record of any approval for this sale and no signatures of any public official approving this sale.

• There is no four points reference, which is required on a lawfully issued land certificate. This requirement includes the signatures of neighboring property owners indicating agreement with the certificate and that there is no dispute over the property. There are no signatures from neighbors on the false cer-tificate.

• There is no original of this falsified land certificate in the files of the Lantian Land Bureau. The Land Bureau files include only a copy of this falsified land certificate.

2. Fraudulent land survey documents fabricated during the Second Land Sur-vey.-- As you know, in 2008 China initiated the Second Land Survey. In 2007, the State Council issued Order Number 5 on the Second Land Survey. This order makes it a crime to fabricate documents related to the Survey.

We have reason to believe that a crime has occurred for the following reasons:

• The Land Bureau failed to conduct a legal survey of our property and land. Instead, they made a fraudulent land survey in the name of Runjia. By this action, they completely confiscated the property of U.S. investors.

• A valid survey requires the signature of adjoining property owners. The Lan-tian Land Bureau sent three officials to our property to take measurements for their fraudulent Runjia survey. To complete the fraud, the Land Bureau representatives signed the survey with a falsified signature of neighboring property owners saying that there is no dispute over this piece of land.

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ALEBA WATER COMPANY

• We have one neighbor, a construction company with a legal representative, Fan Xuan Min. Fan refused to sign the fraudulent Runjia survey prepared by the three officials of the Lantian Land Bureau.

• Instead, the fraudulent survey prepared by the Lantian Land Bureau is signed by Cao Jin Yi on behalf of the construction company. There is no such person at all. The construction company has an employee Tao Jin Yi, but Tao has no authority to sign any documents on behalf of the construc-tion company and, in fact, did not sign the survey on behalf of Fan Xuan Min. Someone in the Lantian Land Bureau fabricated the person Cao Jin Yi and his signature.

Our joint venture is a legal entity formed under China's laws. All of the legal docu-ments can be easily found at the Xi'an Industrial and Commercial Registration Bu-reau. Although we have been operating continuously in Lantian for 10 years, for the past five years, we have operated under the threats and intimidation of the Lantian criminal conspiracy. Despite our continued protests, the Lantian police and the Lan-tian local officials have done nothing.

This matter is serious. The fraudulent documents are officially kept and recognized by Lantian Land Bureau. By fabricating these government documents, officials of the Lantian government have confiscated our property in violation of both Chinese Criminal Law and international law.

We make the following requests:

1. Identify who fabricated these government documents which is a crime under Chi-nese law and the corrupt Lantian official who is promoting this crime.

2. Require Lantian Land Bureau officials to conduct a legal land survey of our factory property and record the proper ownership of our property as Xi’an Aleba Water Company, our joint venture, not Runjia, the representative of the Lantian criminal conspiracy.

3. Punish the officials who are responsible within the Land Bureau and the Lantian Deputy Mayor’s office. We know that at least one Deputy Mayor is involved in the Lantian criminal conspiracy.

4. Investigate who is the “Big Leader” from the Xi’an government supporting the Lan-tian criminal conspiracy. Last July, during the time we made official complaints to

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ALEBA WATER COMPANY

5. the Xi’an government Reception Center, members of the Lantian criminal conspir-acy informed our factory manager that the “Big Leader” in the Xi’an government has “passed the word” to kick out the American investors.

6. Investigate Mu Xi Fung, the Lantian Industrial Park Management Committee Direc-tor. He ordered the closure of our factory entrances during the enlargement of streets last year.

• Six months prior to the enlargement of the street, Mu instructed the mem-bers of the Lantian criminal conspiracy to purchase a thin strip of land di-rectly in front of our driveway. The conspiracy purchased this land for 50,000 RMB and then sold it to Mu’s Industrial Park Committee for a wildly inflated price. Using this trick, Mu has stolen and laundered government money.

• Prior to becoming the Committee Director, Mu built apartments on one of the seventeen pieces of industrial property in Lantian without paying land taxes. He has stolen public money and bribed public officials.

7. Investigate the Lantian Police who have refused to protect the physical safety of our factory staff and our property. We have made no fewer that five requests for protection from physical assaults with no response. The Lantian police actively protect the criminal gangs, all part of the Lantian criminal conspiracy, that run rampant through the County. The following facts are known:

• In December last year, the criminal gang beat up a peasant couple riding a bicycle. They had refused to give way to a car carrying leading members of the Lantian criminal conspiracy. An argument followed. The leader sum-moned ten young toughs to beat the couple. While the leader stayed safely in his car, these gang members beat the man for thirty minutes. Hundreds of people watched, too afraid to intervene. When one member of the crowd yelled out to call the police, a representative of a utility company, he was also beaten until his wife pulled him to safety.

• Earlier last year, a section leader from the China Agricultural Bank, Xi’an branch, met with representatives of the Lantian criminal conspiracy at the Lantian hotel owned by the Lantian government. An argument started. Members of the criminal gang beat the bank representative. Complaints to the police bureau went unanswered.

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ALEBA WATER COMPANY

• Over the past eight years, over twenty peasants in Lantian County have been beaten by members of the criminal gang. These peasants were pro-testing the illegal confiscation of property by the Lantian criminal conspiracy. By confiscating land illegally, the criminal gang converts land to residential villas and sells this property at an enormous profit without paying any land conversion fees to the government.

7. Investigate money laundering taking place in Lantian County. It is widely known in Lantian County that the Languan Construction Company and the Runjia Real Es-tate Company are controlled by the Lantian criminal conspiracy. It is also widely known that a number of Lantian public officials use these companies to wash money. We do not have any concrete evidence of these practices. An investigation into the accounts of these companies can easily find the paths to money launder-ing.

Our lawyers have compiled clear and convincing evidence that Lantian officials have fabricated official documents in order to confiscate our land. These actions amount to a fraudulent confiscation of U.S. investor property by officials of the Chinese gov-ernment. These actions create serious international implications.

If you choose not to investigate these matters more completely, you are effectively protecting the Lantian criminal conspiracy from being exposed. I assure you that on behalf of the U.S. investors, we will never walk away from this confiscation of our property without a full and complete investigation and the punishment of responsible officials.

I came to Xi’an this month to confirm that there had been some progress in our situation. There has been no progress. Our next step will be update our U.S. Sena-tors, Senator Mary Landrieu and Senator David Vitter, about these violations. I in-tend to brief them upon my return to the United States. Our Senators will bring this matter to the attention of top officials in the Obama Administration, as well as your ambassador to the United States.

In addition, we will continue our efforts to brief the U.S. news media on our situation as an illustration of how corruption in China jeopardizes foreign investment. We be-gan this process in July, and it resulted in some initial response on your part, for which we are grateful. We decided at that point to suspend our activities with the U.S. press to see if we could resolve this matter. Three months have now passed,

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ALEBA WATER COMPANY

and the gates to our factory are still blocked. On my return, I will continue to make high level contacts with the U.S. news media.

In a recent interview with CNN in Europe, your Prime Minster Wen Jia Bao clearly stated that if there are any facts showing that foreign investment is being damaged or sabotaged, he would like to be informed directly. We will bring our case to his at-tention directly through U.S. media and government channels.

Our story will spread widely, and you, Mayor Chen Baogen, will be as well known as your city, the proud and ancient capital of China. Now, you are part of our story. Over the past five years, I have written to you directly no less than five letters, and I have received no response from you whatsoever in return.

As you know, China is a member of the International Association of Anti-Corruption Agencies, headquartered in Beijing. We believe strongly that China will prosper by fighting corruption.

Thank you for your continued attention to our case.

Sincerely yours,

Ed Morrison Chairman Xi’an Aleba Water Company cc: U.S. Senator Marry Landrieu U.S. Senator David Vitter

Honorable Chen Bao Gen

Mayor

Xi’an Government

Shaanxi Province, PRC

Date 12/6/09

Dear Mayor Chen,

Subject: Urgent Request for Investigation in Lantian County

This letter informs you of an urgent matter in Lantian County which requires your immediate

investigation. Corrupt public officials are engaged in an illegal expropriation of our joint

venture, Xi’an Aleba Water Company. We have compiled our evidence on a website: http://

lantiancorruption.net

Based on our investigation, corrupt public officials have conspired to deprive us of our

property in Lantian County. The illegal transfer of our Chinese partner’s share in our Joint

Venture has been taken without our approval and in direct violation of our Joint Venture

Agreement. Subsequent acts by corrupt Lantian officials have resulted in the confiscation of

Joint Venture property and the closure of our Joint Venture operations. Our damages now

exceed US$1.3 million.

Corruption in Lantian County has become widespread and serious. We are calling attention

to this situation through our web site and in conversation with Beijing and U.S. based

journalists.

Lantian’s corrupt public officials have illegally transferred ownership of all our Joint Venture

property, transferred these assets to the organized crime group headed by Suen, a former

Lantian policy deputy chief and now a Diaoyanyuan in Lantian court.

In the most urgent terms, I request that you launch an immediate investigation of corrupt

Lantian and Xi’an public officials.

Sincerely yours,

Edward F. Morrison

Chairman, Xi’an Aleba Water Company

Aleba Water Company LLC


T 216-650-7267Work Email: [email protected]

http://lantiancorruption.net






Honorable Chen Bao Gen

Mayor

Xi’an Government


Date 8/4/09

Dear Mayor Chen,

Subject: Urgent Request for Investigation in Lantian County

This letter informs you of an urgent matter in Lantian County which requires your immediate

investigation. During my recent visit to Lantian, I learned that corrupt public officials are

engaged in an illegal expropriation of our joint venture, Xi’an Aleba Water Company. We have

compiled our evidence on a website: http://lantiancorruption.net

Based on our investigation, corrupt public officials have taken the following acts:

1. Mu Xifeng, Lantian Industrial Park Management Director, has become a close associate of

Suen Jun Hong in the past year. Beginning this year, Mu has prevented our

representatives of our joint venture from attending meetings of the Industrial Park, despite

the fact that we have been operating continuously within the park for over 10 years. In our

place, he has illegally recognized the leader of a criminal gang, Suen Jun Hong, as our

representative.

Our Joint Venture board has never recognized any outside interest in our joint venture

whatsoever. The actions of Mu Xifeng undermine our Joint Venture agreement which has

been formally approved by all levels within the Lantian Government and is available to Mu

Xifeng. Yet, Mu ignores his obligations and has participated in the illegal transfer of joint

venture property to gangster Suen.

2. Zhao Jidi, former Director of the Lantian Land Bureau rejected our joint venture application

to pay a land fee and obtain a land certificate for property that the Joint Venture is owed

under our Joint Venture agreement.

Chinese Party A to our Joint Venture agreement never completed his obligations. When

our Joint Venture sought to obtain the land certificate directly for the 7 mu of land which

we have been using continuously for 12 years, Zhao illegally rejected our application.

Instead, we were informed that Zhao had issued a land certificate to Suen’s criminal group,

transferring our Joint Venture property to the criminal group. Zhao took this illegal action

just prior to leaving Lantian County for a new job in another county. Zhao’s action stands in

direct violation of a judgment by the China Economic and Trade Arbitration Commission.


333 Texas Street

Shreveport, LA 71101

T 216-650-7267

Work Email: [email protected]





We initiated action with the Commission to clarify the Joint Venture’s land ownership in

2005.

3. Hao Gaojing, Director of the Lantian Housing Bureau, has been a close associate of Suen

Jun Hong for many years. Hao issued housing certificates to the residential construction

that Suen Jun Hong has built on the County’s 17 industrial properties. These housing

certificates were issued without Suen Jun Hong paying required land fees to the County.

These transactions have made Suen’s criminal gang and his associated network of corrupt

public officials very wealthy. Now, Hao has illegally issued certificates which transfer all of

the US investor’s assets to this criminal group. Hao has taken these actions in direct

violation of China’s joint Venture Law, Land Control Law and our Joint Venture agreement.

Zhao did all this secretly without informing us. All of our joint venture property, including a

workshop, a warehouse, office building, our water well and land have been confiscated.

This is a serious political issue. Suen sent local gangsters to seal off our factory, and he

has blocked all of our factory access. His associates assaulted our factory manager while I

was on the property. One of these gangsters also assaulted me on our factory driveway.

Local policemen tell us that they can do nothing because an illegally issued housing

certificate shows this property belongs to Suen criminal gang.

All the corrupt actions of these Lantian officials are based on an Executive Order made by a

judge from Xi'an Middle Court. In issuing his Order, this judge made a determination that our

Chinese Partner should to use property outside his interest in our Joint Venture to pay his

bank debt. The court’s decision never mentions our partner's shares in our Joint Venture.

But Lantian officials ignored this fact by issuing land and housing certificates to Suen Jun

Hong’s group. The officials not only converted our partner’s share in our Joint Venture, but

also transferred our US investors’ assets to the Suen group.

Our Chinese partner informed us that he decided to transfer his share (24%) in our Joint

Venture to a housewife, Han Minxia. We refuse to recognize this transfer, because we have

the first right of refusal to buy Party A’s shares, as stipulated in our Joint Venture agreement

and under Joint Venture Law. Now Lantian’s corrupt public officials have illegally transferred

ownership of all our Joint Venture property, transferred these assets to Suen group, and

deprived us of our legal rights. Suen, a former Lantian policy deputy chief and now a

Diaoyanyuan in Lantian court, represents the interests of a number of local officials.

In the most urgent terms, I request that you launch an immediate investigation of corrupt

Lantian and Xi’an public officials. Please inform our joint venture representative of your

decision by Friday, August 21. After that date, we will launch our campaign to inform officials


333 Texas Street


T 216-650-7267




in the US and the international press about the illegal seizure of joint venture property taking

place in Lantian County.

Sincerely yours,

Edward F. Morrison

Chairman

Xi’an Aleba Water Company


333 Texas Street


T 216-650-7267





ALEBA WATER COMPANY

July 28, 2010 Lantian Land Bureau Lantian County Xi’an Shaanxi Province PRC Dear Sirs;

Your response to my July 10 letter to you was most disappointing. Your position does not comply either with the facts or with Chinese Joint Venture law. Your decisions regarding the seven mu of land on which our factory op-erates constitutes a confiscation of foreign investor property by your Office. We regard this matter, the confisca-tion of U.S. property, most seriously.

You have informed our attorney that you issued a land-use certificate covering our factory land to Runja accord-ing to an executive court decision. Yet, Runja was never a party to this decision. Runja, instead, is part of a crim-inal conspiracy led by former deputy police chief, Sun Junhong.

To cover your part in this conspiracy, you showed our attorney documents indicating that our land was sold from Han Minxia to Languan Construction Company and then to Runjia. It is well-known within the County that all of these parties are part of the criminal conspiracy led by Sun Junhong. Your Office has again refused to show our lawyer the land certificate issued to Runjia.

As you are well aware, the Central Government in 2007 issued an order to create accurate records on the use of land throughout China. The Central Government gave land bureaus throughout China the responsibility to draw accurate maps of land-use complete with signatures from the users of land and their neighbors. This process was completed in 2009. Yet, without our knowledge or consent, your Office issued a land certificate covering our factory property to Runjia in January 2010. We demand that you provide to our Joint Venture representatives documents showing how you described our Joint Venture property. As you are well aware, the Central Govern-ment has made very clear that fraudulent maps will be treated very seriously.

Beyond this demand for records describing our land, we have the following specific questions for your Office:

1. The court decision for Hanminxia was erroneous in both fact and law. Do you have any court decision cover-ing our property that establishes any rights whatsoever for Runjia? Without a lawful court decision in the fa-vor of Runjia, Runjia has no more right to our Joint Venture land than Hanminxia. How can you justify provid-ing a land certificate to Runjia when he was not party to this decision?

2. How did you describe our Aleba Water Factory in near Second All China Land Investigation? Is our Joint Venture company listed on your map and investigative documents that you were obligated to prepare follow-ing the directive of the Central Government? I remind you that we have been in continuous operation on this property since 1998. We have joint venture documents, approved by the Xi'an government clearly stating that this land was contributed to our joint venture. Further, we have a decision from the Arbitration Commis-sion in Bejing directing Zheng Zhong to comply with his obligations under our joint venture contract. If we our Joint Venture is not listed on those documents, how did you justify failing to complete accurate land records, as required by the Land Investigation Regulations published in 2007 by China's State Council? If our factory is listed on those documents, how do you justify transferring our rights to Runjia in January 2010 without in-

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forming us or requesting us to sign the land certificate? In the land certificate to Runjia, how was the seven mu of land described? Did you describe this property in accordance with the Land Investigation Regulations published in 2007 by China's State Council?

3. In 1998 when Xi'an Aleba Water Company registered, your Office wrote a letter to Lantian and Xi'an gov-ernment offices regulating our joint venture. Your letter assured these authorities that your Office was in the process of issuing a land certificate for the seven mu of land on which our factory operates. On the basis of your letter, the Lantian and Xi’an authorities approved the establishment of our joint venture. These facts clearly establish that your Office knew of the existence of our factory on the seven mu of land. What justifica-tion do you have for deceiving the Lantian and Xi’an government officials who approved our joint venture? What justification do you have for asserting that your Lantian Office has the authority to nullify Chinese Joint Venture law and make these approvals meaningless?

4. The Lantian Industrial Company, a company owned by the Lantian Government, contributed 40 mu of land to Xi'an Aleba Soya in 1992. This land was the public property of the people of Lantian. This plan was not covered by a land certificate until 1998 when the Xi'an government authorized that this 40 mu of land could be used for industrial purposes. Why did your Office not object to the executive decision by Wang Baosheng from Xi'an Middle Court? This decision included the language to the effect that Xi'an Aleba Soya (owned by Zheng Zhong) could convert public land to private use. The decision enabled Zheng Zhong to pay his debts to Hanminxia by conveying his right to use the public’s land. This decision, amounting to the conversion of public property to private use without any compensation to the citizens of Lantian, should have raised alarms in your Office. Your Office, we understand, is established to protect the people’s interest in their land. If so, did you take any measures to safeguard the public right of the Lantian people to this land? If not, your failure to take any action to protect the rights of the Lantian people indicates that you no longer represent the inter-ests of the people of Lantian.

5. Xi'an Aleba Water was established in 1998. In our Joint Venture contract and Articles of Association, Aleba Soya (Zheng Zhong or Party A) contributed seven mu of land a workshop and a well to our Joint Venture. The JV agreement and Articles of Association were approved by Lantian and Xi'an governments according to China's Joint Venture law. After taking our case to the Arbitration Commission in Beijing and getting a de-cision in our favor, we submitted an application to your Office in 2007 to pay for the Right of Using the Land and to get the land certificate that should have been contributed to the Joint Venture years ago. But you re-jected our demand. Your rejection raises several questions: Is our Joint Venture a legal Chinese company in your eyes? If not, on what basis does your Office make a decision that contravenes the decisions of the Lantian and Xi’an governments to approve this joint venture in 1998? If you recognize our Joint Venture, on what basis does a clearly erroneous court decision override our legal rights under China’s Joint Venture and Land Administration laws? On what basis does your Office claim authority that overrides Chinese Joint Venture law?

6. Your actions interpreting the decision by the Middle Court judge Wang Baosheng eliminates our Joint Ven-ture legal rights and subverts China's Land Administration laws. Your complicity in this decision constitutes another element of Sun Junhong’s criminal conspiracy to convert Lantian’s public land to illegal private pur-poses. The people of Lantian, through Lantian Industrial Company, contributed land to the joint venture soy-bean factory. Yet, your Office enabled this land to be converted to private use without compensation to the people of Lantian. Your Office, which is supposed to protect the people's rights to the land in Lantian, was used as an instrument of a criminal conspiracy. Why did your Office take part in this clearly illegal conver-sion and the subversion of the rights of the Lantian people? Why did your Office, which supposedly repre-

Page 3

sents the people of Lantian, not object strongly to Wang Baosheng’s decision which enabled Zheng Zhong to convert public property to a private use without compensating the people of Lantian?

7. We have examined Middle Court judge Wang Baosheng’s actions closely. Our lawyers closely reviewed the executive decision made by Wang Bosheng. It includes three pages. One is No. 227-1. You cite this two pages as a basis for your actions. As we have indicated to you, your legal reasoning is specious and contra-ry to the clear facts on the ground.

You have ignored another page of the executive decision, a handwritten page by Wang Baosheng. This page is kept in the Xi'an Middle Court lawsuit record together with 227-1. This handwritten page says that the Aleba Water Joint Venture is a legal entity and can continue its operation. This handwritten page is also part of the executive decision. (This handwritten page is obviously an attempt by Wang Baosheng to try to step outside the criminal conspiracy to expropriate our property. However, a fraud, once committed, cannot be undone. In our view, Wang Baosheng is clearly a party to Sun Junhong’s criminal conspiracy that now, by your actions, includes your Office.)

Since the court decision and the handwritten page acknowledges the legal existence of our Joint Venture and our right to continue operating, how could you issue a land certificate to Runjia that expropriates our rights to use our land? Why did you not follow the full Middle Court decision, including the Wang Baosheng's directive on the handwritten page?

In his court decision, even this corrupt judge Wang Baosheng did not refer to "40 mu of land". He only indi-cated that he has agreed that Aleba Soya could convey its land use rights to Hanmianxia. Since 1998 with the formation of our Joint Venture, these rights have never extended to the 7 mu of land on which our factory operates.

How, then, could you issue a land certificate to Runjia covering 40 mu of land, including our factory com-pound, which is clearly separated from the grounds of the soy bean factory? This reference to 40 mu only appears in a private agreement between our Chinese partner Zheng Zhong and Han Minxia. This private agreement is not a valid contract, since it attempts to convey land already owned by our Joint Venture. Our Joint Venture has been operating openly and in clear public view since 1998. Zheng Zhong was under obli-gations to follow the Joint Venture contract. The Arbitration Commission decision in Beijing clearly indicates Zheng Zhong's obligations. In light of the Arbitration Commission’ ruling, how could you issue a land certifi-cate that directly violates the terms of the Commission’s ruling? Further, how could you issue this certificate without informing our Joint Venture, in clear violation of China’s Land Administration laws?

You could have easily confirmed Zheng Zhong’s precarious legal position by visiting our factory, interviewing our Joint Venture manager, inspecting our Joint Venture documents, and reviewing the Arbitration Commission’s ruling. Nevertheless, your Office has made decisions to ignore these legally binding documents and implement a fraudulent private contract. This fraudulent contract clearly subverts Chinese Land Administration and Joint Ven-ture laws. By following the directives of a fraudulent private contract you have ignored:

• the 1998 approvals establishing the legal existence of our Joint Venture by the Lantian and Xi'an governments,

• the handwritten directive of the Middle Court judge Wang Baosheng that is part of his executive decision in litigation involving Hanminxia and Zheng Zhong,

Page 4

• the decision by the Arbitration Commission in Beijing directing Zheng Zong to fulfill his obligations under our Joint Venture contract,

• the clear terms of our Joint Venture contract which prohibit Zheng Zong from conveying any interest in the Joint Venture (including the 7 mu of land) without the approval of the Board of Directors,

• the legal obligation of your Office to protect the interest of the Lantian people in their land,

• the Land Investigation Regulations published in 2006 by China's State Council, as well as our Joint Venture rights under China’s Land Administration law, and

• the clear facts that our Joint Venture factory has been operating to deliver mineral water to the people of Xi'an and Lantian continuously since 1998.

• Suppse Han Minxia got the land “legally” from zengzhong, your ooffice should ask her to pay Lantian govern-ment for obtianing the Right of Using the Land, and to pay for all other taxes before she could sell the land to Languan Constrcuction Company, which must follow the same procedures before selling the land to Runjia. Your office cancelled all those procedures for Hanminxia and Labguan Construction Company, causing great loss of tax income for Lantian people.

You have chosen to ignore all of these facts, contracts, legal decisions�China.s JV Laws, Laws on Land, China State Councel’s Orders No.518, ,Ministry of Land & Recourses Orders No.45 and follow a fraudulent, illegal pri-vate agreement to issue a land certificate to Runjia. Your conduct is outrageous, shameful, corrupt and commit-ing crimes. You are willfully joining a criminal conspiracy in Lantian that has torn down more than 17 factories and converted these proprieties illegally to private use. This conspiracy has destroyed large parts of the Lantian economy and thrown hundreds of people out of work. You have turned your back on the Lantian people, the Xi'an government, and the Central Government to expropriate the property of U.S. investors. Our Joint Venture will never submit to your corrupt decisions and the organized criminal conspiracy your Office now represents. You have informed us that you have no intention to cancel Runjia's land certificate. Your position is now clear and on the record. Your Office operates as part of the corrupt conspiracy that is poisoning the economy in Lanti-an. It is indeed ironic that the U.S. investors are put in a position of protecting not only their property interests, but also the interests of the Lantian people. Your refusal to show our attorneys the original land certificate you issued to Runjia, a member of this criminal conspiracy, clearly indicates that your Office has been compromised and no longer represents the interests of foreign investors in Lantian, the people of Lantian, or the interests of the Chinese Central Government. I strongly reiterate that our interest is in eliminating heavy burden of corruption from Lantian County’s economy. We know that a deputy Lantian mayor is behind Sun Junhong's group, which has been cruelly treating Lantian people and has never been punished by local police. This criminal gang has used physical force and intimidation as well as bribes to subvert the Lantian County economy. Citizens in Lanti-an, including representatives from our factory, have been assaulted and beaten. The Lantain Police have not responded to my demands for protection. Since there is clearly no way to resolve this issue in Lantian, we are now determined to bring the corrupt actions of your Office and other local officials in Lantian to the attention of China's top leadership. We will refer your corrupt and criminal acts to Chinese top leaders though all channels.

We have alerted you to the seriousness of your actions. The time for warnings have past. We will now move our protest to a higher level. The actions of your Office constitute a confiscation of U.S. investor property, as well as a disgrace to the people of Lantian and the Chinese Central Government. Your actions carry very serious impli-cations for U.S.-China relations. You have not seen fit to comply with Chinese law and protect the interests of

Page 5

foreign investors, the Lantian people or the Chinese Central Government. The Chinese Government has taken a strong stand against corruption, and we strongly support these efforts. Chapter 8 of the Criminal Law of the People's Republic of China (last amended in 2009), criminalizes both active and passive corruption in the public sector. China has signed and ratified the United Nations Convention against Corruption (UNCAC). China is committed to the UNCAC and, as symbol of the Chinese leadership's commitment to combating corruption, Chi-na hosts the International Association of Anti-Corruption Authorities (IAACA) headquarters in Beijing. In 2007, China adopted the Regulations on Open Government Information. Further, Article 41 of the Chinese Constitution ensures whistleblower protection. The constitution ensures the right of all citizens to report unlawful conduct and forbids retaliation. The Central Committee of Discipline Inspection and the Ministry of Public Security have opened 24-hour telephone hotlines as well as special websites. We assure you that we will not rest until the interests of both foreign investors and the people of Lantian are protected by honest government officials. In this effort, we stand willing to do whatever we can to see that the anti-corruption policies of the Chinese State Council and other national level bodies are followed in Lantian County.

Sincerely yours,

Edward F. Morrison

Chairman Xi’an Aleba Water Company cc: U.S. Senator Mary Landrieu U.S., Senator David Vitter Lantian Party Committee Secretary Li Yi Lantian Government Mayor Miao Zhizhong Lantian Inspection Committee of CPC Lantian People’s Congress Lantian Political Consultive Confrence Lantian people’s procuratoral Office Lantian Police Burau Lantian Economic & Trade Bureau Lantian Industrial Park Management Committee

Our demands to the Lantian Mayor delivered

on Tuesday June 28, 2009Page 1 of 2 (Note the date should read July 28, 2009)

Our demands to the Lantian Mayor delivered

on Tuesday June 28, 2009Page 2 of 2 (Note the date should read July 28, 2009)

Background

On Tuesday, July 28, 2009, I requested a meeting with the mayor of Lantian. I had just visited our joint venture water factory and paid a visit to the Lantian police station located in the industrial park. At the factory, I took video to show how severely our operations have been impaired by the obstructions placed around the factory by a criminal gang operating within the county. These obstructions include locks on the gates, concrete pilings in the driveway, and a 10 foot high pile of dirt blocking our access to the road. I had not learned yet that the mayor had approved the transfer of our joint venture land and buildings to the criminal syndicate. Not surprisingly, the mayor refused to see me.

April 17, 2009

Lantian Economic and Trade Bureau

Xi’an Economic Development Zone Administration

Xi’an Economic and Trade Bureau


Dear Sirs,

In 1996, your agencies approved the formation of Xi’an Aleba Water Company

(the “Water Joint Venture”), a joint venture located Lantian County. We gratefully

appreciate your support of our investment in Shaanxi Province. We want to

update you on the progress of our investment and to request your support for

changing the form of our investment into a Wholly Owned Foreign Enterprise.

Here are the facts supporting our request.

1. We formed our joint venture in 1998 with Xi’an Aleba Soya Company (the

“Soya Joint Venture”) and the Lantian County Government as our Chinese

Joint Venture partners. In 1998, the Soya Joint Venture was controlled as

follows: 51% owned by Mr. Zheng Zong; 25% owned by Dr. Ron Bradley;

and 24% owned by Lantian County Government.

2. The ownership of the Water Joint Venture was 77% Aleba Water Company,

LLC, a Louisiana limited liability company, and 23% by the Soya Joint

Venture.

3. In 1998, the contribution of the Soya Joint Venture constituted the right to

use seven mu of land within the factory compound of Soya Joint Venture.

The land certificate for the use of this land was never contributed to the

Water Joint Venture. Since Mr. Zeng Zong controlled the Soya Joint Venture,

Aleba Water Company333 TEXAS STREET, SHREVEPORT, LA 71101 [email protected]

TEL 216 6507267

it was his responsibility to complete the contribution of the land certificate

to the Water Joint Venture.

4. The Water Joint Venture began water sales in 2000. Over the next four

years, we were able to build up our business to a level of 30,000 customers

to become one of the important mineral water companies serving the Xi’an

market. We invested over 3 million RMB in marketing expenses to build our

market position.

5. In 2004, we were informed by the Xi'an Commercial Industry Registration

Bureau that our business operating license for the Water Joint Venture

could not be renewed, since Mr. Zeng Zong and the Soya Joint Venture had

not contributed the land certificate as they were committed to do under the

joint venture contract for the Water Joint Venture. We immediately began to

try to locate Mr. Zeng Zong to inform him of his responsibilities under the

Water Joint Venture contract. We failed to locate him.

6. In 2005, the board of the Water Joint Venture authorized the filing of a

petition with the China International Economic & Trade Arbitration Commission

requesting specific performance from Mr. Zeng Zong and the Soya Joint

Venture to contribute the land certificate needed to restart operations at the

Water Joint Venture. We continued to try to locate Mr. Zeng Zong, but we were

unsuccessful.

7. In 2006, we learned that Mr. Zeng Zong illegally transferred his interest in the

Soya Joint Venture -- allegedly including his interest in the Water Joint Venture

-- to Han Minxia. The Board of the Water Company Joint Venture will not

recognize Han Minxia as a new member of the Water Joint Venture, since Mr,

Zeng Zong transferred his interest in violation of his obligations to inform the

Board under the Water Joint Venture contract. We also believe that Mr. Zeng

Zong may have violated Chinese criminal law by transferring his interest in the

Water Joint Venture in an effort to satisfy debts that he had been ordered to

pay by a Lantian County court.

8. In 2006, representatives of the Water Joint Venture presented our case to the

China International Economic & Trade Arbitration Commission in Beijing. Mr.

Page 2

Zeng Zong failed to appear. The Commission issued an arbitration order giving

Mr. Zeng Zong six months to contribute the land certificate. Mr. Zeng Zong has

failed to perform.

9. During this period, the operations of the Water Joint Venture were suspended,

and we suffered complete loss of our 30,000 customers and the network of

retail shops we had built to serve the Xi’an market. The value of our 3 million

RMB investment in marketing has been totally lost.

10. We have exhausted every effort to resolve this matter in accordance with

Chinese law and procedure. The current situation remains untenable. The

factory cannot operate and our U.S. investors -- who provided all of the cash

contribution to the Water Joint Venture -- have no further recourse to recover

their investment.

Based on these facts, we request your authorization to convert our Water Joint

Venture into a Wholly Owned Foreign Enterprise. We believe that we have

complied with both the spirit and letter of Chinese law governing foreign

investment. We remain committed to seeing our venture -- which provides

needed clean, high quality healthy mineral water to the residents of Shaanxi

province -- succeed. We need your assistance, however, to move forward.

We respectfully request that you grant our request to make this change in the

corporate form of our investment.

Sincerely yours,

Ed Morrison

Chairman, Xi’an Aleba Water Company

Page 3

MEMORANDUM

TO: Ed Crawford

FROM : Ed Morrison Wang Hui

SUBJECT: Situation with Aleba Water

DATE: April 17, 2009

This memorandum outlines the key facts surrounding our investing in the Joint Venture, Xiʼan Aleba Water Company.

1. We are increasing pressure on the Xiʼan government to investigate our Chinese partner, Mr. Zeng Zong, for his failure to contribute a land certificate to the Joint Venture. The failure to contribute this certificate violates the Joint Venture Agreement and has resulted in the Xiʼan Government from issuing a business license. As a result, our operations have been suspended.

2. We are pursuing a strategy of obtaining the land license and converting the venture to a Wholly Owned Enterprise. We believe this strategy creates the best opportunity for return of your investment.

3. We are submitting a strong letter to the Mayor of Xiʼan to investigate local corruption in Lantian. If launched, this investigation will help reverse the claims of Mr. Zeng Zongʼs successors in interest, who now claim an ownership interest in the joint venture.

4. We have issued a Power of Attorney to Wang Hui to pursue converting our Joint Venture to a Wholly Owner Foreign Enterprise and to secure the land certificate from the Lantian Government. The certificate, we estimate, will cost 300,000 RMB.

5. We have prepared Board resolutions to execute the strategy. We will be requesting your signature in the next few days.

6. The current cash position has the Joint Venture with about $57,000 in a USD account and about 100,000 RMB (about another 15,000 USD).

7. Under our current plan, Ed will return to Xiʼan in July to press our case forward with the local authorities and to develop the nest stage of our plan for recovery of your investment.

Resolution Board of Directors Xiʼan Aleba Water Company

WHEREAS, Party A, Xiʼan Aleba Soy Company, represented by Mr. Zeng Zhong, Vice-Chairman of Xiʼan Aleba Water Company (the Joint Venture) has violated the Xiʼan Aleba Water Joint Venture Agreement by failing to convey its land certificate to the Joint Venture management on time.

WHEREAS, The Xiʼan Registration office has refused to renew Joint Ventureʼs license since 2001 because of Mr. Zeng Zhongʼs lapse, and the Joint Venture has suspended operations since that time. This suspension has caused great loss to the Joint Venture and Party B (Aleba Water Company, LLC). About 3 million RMB in organizational and marketing expenses cannot be recovered because the Joint Venture has lost all its 30,000 customers when operations were suspended.

WHEREAS, In 2005 Party B brought the matter to China Arbitration Commission in Beijing and the arbitration verdict requests Party A to convey its land certificate to JV within 2 months. Party A has failed to meet its obligations under the Commission ruling.

WHEREAS, According to the Joint Venture agreement and the Articles of Association, the Board of the Joint Venture has the the right to make resolutions on other important matters in addition to those clearly stipulated .

RESOLVED, the Board has authorized the Joint Venture management to prepare all documents and submit them to the Xiʼan government for approval:

• To pay Lantian government for the land;

• To re-organize the JV without Party A;

• To cancel Party Aʼs shares (23%) in the Joint Venture;

• To nominate new board member John Atkins.

CERTIFICATION

I HEREBY CERTIFY that the foregoing is a true and correct copy of a resolution regularly presented to and adopted by the Board of Directors of Xiʼan Aleba Water Company at a meeting duly called and held on the 14th day of July, 2008 at which a quorum was present and voted, and that such resolution is duly recorded in the minute book of this Joint Venture;

__________________________________Edward F. Morrison, Chairman

Aleba Water Company333 TEXAS STREET SHREVEPORT, LA 71101 TEL 216 6507267

July 2, 2008!Mayor Chen Baogen and Deputy Mayor Zhu ZhishengXi’an City GovernmentXi’an, Shaanxi Province PRC!Dear Mr Mayor Chen and Mr. Deputy Mayor Zhu,

This letter concerns a Joint Venture in your jurisdiction. Xi-an Aleba Water Company’s Chinese partner Zeng sold its share in our joint venture to Han Minxia. This transfer took place illegally without our JV board’s approval, as specified in our JV agreement. Han sold these share illegally to a fourth party, Languan Construction Company. Our investors legal rights in China have been severely damaged by these illegal transfers in direct violation of our JV agreement. This fourth party has deep social connections in Lantian County. Its general manager Mr. Sun used to be one of Lantian’s police officials. He has locked our factory’s front door and blocked the way. Our employees’ normal activities and company’s normal operation have been restricted. In the USA this sort of action would constitute a crime. Years ago, we answered the call from Lantian government to bring investment there in a good will action to do something good for Chinese peo-ple and your society. Now our legal rights have been offended again and again under the watchful eyes of local police-men. I have to write to you for help in this matter.

Recently, your Vice-premier Wang Qishan visited USA and signed an agreement with USA government to protect in-vestment in each other’s country. I hope our investment and legal right in Xi’an can be protected under Chinese JV Law. In fact, local policemen showed some sympathy for our situation, but they could not do anything because this Mr. Sun was their leader before and has deep social connections in Lantian. He is well-known in Lantian for his dubious activities. We US investors have decided to sent a US journalist from Beijing to investigate the matter and give us a report. We will present this report to you and Mr. Wang Qishan later in the event that our factory and its employees activities cannot be protected. As constantly threatened by Sun, our employees are living and working in fear. They threaten to beat our em-ployee out of the factory and throw our equipment away as they did before to other local Chinese.

Now our employees have to make a hole in the surrounding wall to get in and out. We strongly appeal you to help us. We have the first right to buy the shares and we cannot accept the fact that our legal right has been trampled again and again. Please help our employees and free them from local threats and let our JV operate normally.

If we do not get some satisfactory resolution, I will travel to China shortly and personally document this situation and put it in a business case that will be taught to U.S. business students about the lawlessness and corruption that prevails in China today. I am currently affiliated with a number universities, including Yale University, Purdue University and the Uni-versity of Virginia. I will also consult with my contacts at Cummins headquarters in Columbus, IN to discuss this matter. I assure you that I will get this story to a wider audience. I hope you can resolve this matter before we reach this stage.

Sincerely yours,

!!!

Edward MorrisonChairman, Xi’an Aleba Mineral Water Company

China International Economic and Trade Arbitration Commission

6/F Golden Lang Building, 32 Liang Ma Qiao Road, Chaoyang District

Beijng

Peoples’ Republic of China

Date 9/12/05

SUBJECT: Power of Attorney

Dear Sir or Madam,

In September 2004, I received a report from Xi’an Aleba Water management saying our

application for recertification of our business license was returned to us by Xi’an Industrial

and Commercial Registration Bureau without approval.

On hearing about this I flew to Xi’an early October 2004. I went to the Registration Bureau

office with Xi’an Aleba Water company’s manager Wang Hui and Hu Jianrong, the assistant

manager. Two officials Mr. Li Lin and Mr. Liu Zhi from the Registration Bureau office received

us. In their meeting room Mr. Li told me that foreign investors are welcome to Xi’an. As for

the failure to recertify our business license, I was told that the problem was not US investors’

fault at all. I was told that the problem was Chinese partner’s responsibility. Our Chinese

partner is Mr. Zheng, Chairman of Board of Directors of Xi'an Aleba Oil Company, Ltd.

According to our joint venture agreement, our Chinese partner’s investment includes 4,673

square meters of land. It turns out that this land belongs to government. It does not belong

to our Chinese partner, and it, therefore, cannot be contributed to the joint venture. It is an

fraudulent investment on the part of Chinese side.

We submitted our application for recertification to the Registration Bureau office around April

2002. During the past two years, various Xi’an government officials have been trying to solve

the Land Certificate issue in order to pave the way for recertification of our business license.

Their final answer was that our Chinese investors must provide their Land Certificate. As our

JV was facing closure and, in order to reduce the losses to minimum, in July 2005 we wrote

a letter to the Mayor of Xi’an to ask for his help.

On August 8th 2005, a coordination meeting was called by Foreign Investors Complaint

Office under the instruction from the Mayor. Attending the meeting were two representatives

from our joint venture, one official from Xi’an Land Management Bureau, one official from

Lantian County’s Land Management Bureau, a vice-mayor of Lantian County government,


333 Texas Street


T 216-650-7267

F 123.456.7891

[email protected]


and two officials from Xi’an Registration Bureau. The meeting was presided over by an official

from Xi’an government’s Foreign Investors Complaint Office. Early September 2005, we

received a notice from that office indicating that the solution is now to go to arbitration.

Having exhausted all our remedies in Xi’an, we are now turning to the China International

Economic and Trade Arbitration Commission to assist us in resolving this matter.

We would appreciate your expeditious consideration of our situation. Our business is being

seriously jeopardized by this delay. Despite over two years of effort, we have not been able to

resolve this issue.

Sincerely yours,

Edward F, Morrison

Managing Director

Aleba Water Company, LLC.


333 Texas Street


T 216-650-7267

F 123.456.7891

[email protected]


Business

Aleba Water Correspondence with the Xi'an Government 2008-2014