Judicial auction in Henan goes online

A local court in central China's Henan province listed a Kia sedan seized in a lawsuit on an online retailer last week, marking the province's first online judicial auction.

Ma Junjie, an official with the Henan Provincial Higher People's Court, said the province has decided to move its judicial auctions online. All 19 intermediate people's courts registered accounts last week on Taobao.com, China's largest online consumer shopping platform, said Ma.

The car's information was posted online at 10am on March 4 by the people's court in Xinmi city. On the same day, a 164.72-square-meter apartment in the city was also put up for auction online.

The auction of the car will begin at 10 a.m. on March 17 with a starting price of 70,000 yuan (11,403 US dollars), and the auction will last for 12 hours. Bidders must submit 10,000 yuan as a deposit when signing up for the auction.

So far, three people have signed up, more than 14,000 have browsed the car's online auction page, and over 20 people have taken a look at the car in the court.

Ma Junjie said online auctions are more transparent than traditional judicial auctions and can break geographical restrictions.

They attract more bidders and have a higher auction rate and premium rate, which can better protect the interests of creditors and debtors, he said.

Transparency is the best deterrent to corruption, he said, adding that apart from some individual assets that require sophisticated disposition procedures, all seized property in the province will be auctioned online.

Chinese courts' handling of assets seized in lawsuits has been criticized as lacking in transparency, with transaction prices far below the actual value of items being auctioned. Court workers and auction agents are often suspected of making under-the-table deals to rig the auctions in their favor.

Online judicial auctions were initiated by the court system in Zhejiang province in an effort to combat corruption and promote transparency.

In July 2012, a BMW sedan was sold on Taobao.com after being seized in a lawsuit by the Beilun District People's Court in Ningbo City. It marked the country's first judicial auction to take place on a third-party commercial website without an agent.

So far, many local courts in Zhejiang have cooperated with local banks to provide mortgage loans to buyers of seized houses auctioned online in order to promote the online auctions.

Chen Jingying, a legal expert from Shanghai, proposed developing online judicial auctions during the ongoing annual session of the National People's Congress (NPC) and asked the government to make uniform regulations for the auctions.

She said the online auctions do not require commission, which benefits creditors, and their convenience, high efficiency and trustworthiness promise more transparency.