Civil dispute over divorce settlement turns into criminal investigation and ex-couple could be sentenced to 10 years in prison
A civil dispute over a divorce settlement turned into a criminal investigation after a local court found that 2 retired Chinese civil servants were fighting over nearly 100 million yuan ($15 million) in assets — an amount that far exceeded their official earnings.
The case, which has recently drawn intense public scrutiny in China, highlights the exorbitant wealth accumulated by some mid-level officials during the country’s decades of economic growth, as well as the risks of exposing domestic disputes in public courts.
In a ruling dismissing the civil case, the Putuo District People’s Court in Shanghai declared that the couple’s assets were “obviously incompatible” with their legal income and that they did not provide a reasonable explanation. The court closed the case, forwarding it to criminal investigators and passing on corruption leads to anti-corruption agencies.
The dispute began when a retired civil servant, identified in court documents only by his surname Wang, sued his ex-wife, identified only as Zhang, seeking the division of 14 properties valued at 98.7 million yuan. The couple married in 1976 and agreed to a divorce in 2007, but did not divide their joint assets at the time.
In a previous case in Jiangsu province, Wang had requested the division of assets valued at an even higher value of 140 million yuan before the case was transferred to Shanghai.
The court battle quickly turned into a mutual exposure of undeclared assets, with each side listing the other’s major assets, according to the court’s ruling.
Wang accused Zhang of possessing or receiving several large sums, including 10 million yuan returned by a former colleague and 25 million yuan from a 2010 corporate fraud case.
He also alleged that she received 32 million yuan when divesting from an investment in a project between 2015 and 2016 and collected more than 30 million yuan in commissions from Baoyu Coal Transportation and Marketing Co. between 1997 and 2007.
Wang further alleged that Zhang owed 5 million yuan in debt to third parties and that he once bragged about losing between 60 and 70 million yuan in the stock market.
In response, Zhang detailed Wang’s considerable assets. She said he owned properties in Beijing and Zhengzhou, as well as a debt of 4 million yuan to an individual identified only by his surname Wu.
She also mentioned Wang’s HSBC wealth management products and trust funds, which she said totaled more than 5.41 million yuan and 2.01 million yuan respectively, as well as a personal trust fund of HK$2.5 million ($320,000) held at HSBC.
Zhang also produced bank statements showing that an account in Wang’s name had transactions totaling 31.6 million yuan between August 2007 and December 2008, with 27.5 million yuan transferred from his stock trading account.
The court noted that Wang spent his career in the railway system and state-owned enterprises, retiring in 2016 from China Energy Investment in the role of deputy general director — a mid-level official position.
Zhang was previously a police officer and was later transferred to another police station, although she effectively stopped working after moving to Shanghai, according to the ruling.
According to Chinese law, the case carries serious legal risks for both parties. Article 395 of China’s Penal Code makes possession of unidentified high-value goods a crime. According to the article, when a public official’s assets or expenses clearly exceed his legal income and the individual cannot explain the origin of the discrepancy, the excess is treated as illicit gain.
The penalty for such a crime is up to 5 years in prison for “huge” discrepancies and 5 to 10 years for “extremely huge” discrepancies.
According to a judicial interpretation issued in April 2026 by the Supreme People’s Court and the Supreme People’s Procuratorate, a discrepancy is defined as “huge” if it exceeds 3 million yuan and “extremely huge” if it exceeds 10 million yuan.
According to these criteria, the magnitude of the assets exposed in Wang and Zhang’s divorce proceedings could put them both at risk of long prison sentences if they are found guilty of corruption.
The Shanghai court’s decision to dismiss the civil case was based on the Supreme People’s Court’s guidelines, which state that if a court discovers suspected economic crimes during the trial of a civil economic dispute, it must close the case and hand over the evidence to criminal investigators.
The ruling was handed down in September 2023, but went virtually unnoticed until it was published online earlier this year and began circulating widely on Chinese social media in recent days, sparking intense debates about the hidden wealth of public officials.
A lawyer representing one of the parties declined to comment.
This report was originally in English by Caixin Global on June 4, 2026. It was translated and republished by Poder360 under mutual content sharing agreement.
