Crazy Stone: A Criminal Rashomon Triggered by Land Flattening

Why Is It Difficult for AI to Prevent Illegal Mining Charges in Government Meeting Minutes?

By Dongsheng

Edited by Xueli Wang

There is never a shortage of popular check-in spots on social media.

In the circle of Minnan people, a place known as “Zhengxing Xinlaifu Town” has recently been dubbed the “Little Jingdezhen.” Tourists hold their phones up, endlessly snapping pictures of the blue-and-white porcelain bowls embedded in gray brick walls and the incomplete patterns on old wooden carvings. They label this place as “retro” and “niche,” describing it as a Minnan old dream built from broken porcelain shards, old ceramic pots, and old stone slabs.

No one could have imagined that the stones beneath their feet were pulling the entire town to the brink of criminal prosecution.

Eight years ago, during the early development of the town, a construction team leveling the land unexpectedly uncovered granite that had been asleep for millions of years. In the eyes of the developer, Xingyuan Company, which is under Zhengxing Group, clearing this granite was essential to save the project and regain the timeline. The local government held four meetings on this matter, issuing meeting minutes, and the company disposed of some stones according to these minutes, paying more than 32 million yuan in mining rights revenue.

In their understanding, these documents with red official seals were compliance certificates.

But the matter of the stones did not end there. Ultimately, several individuals, including Zhengxing Group’s founder Lai Jianhui, were pushed to the defendant’s bench for illegal mining charges.

As a prominent industrial giant in the Minnan business world, Lai Jianhui once made it onto the Hurun Rich List. However, in the face of these unexpected “stones,” past glories failed to serve as his shield.

In November 2025, the prosecution initiated charges, accusing the company of illegal mining valued at 258 million yuan. A month later, some related defendants were tried first, while Lai Jianhui is still awaiting a final ruling.

To further clarify the facts, on March 12, 2026, the defense attorney submitted an application for a site inspection to the court. The application outlined the current state of the town: a wellness village had constructed five high-rise residential buildings, two of which had officially opened for occupancy during the 2022 Spring Festival; a comprehensive commercial entity and Traditional Chinese Medicine street had also been built and put into use, becoming a local check-in hotspot.

Zhengxing Xinlaifu Town.

More crucial evidence is hidden in those unremarkable corners— the application mentioned that a large amount of sand and gravel cleared during construction was visible, used for retaining walls, river embankments, and other project-related constructions. The defense requested the court to organize a site inspection involving the prosecution, defense, and trial parties. They aimed to prove one fact: according to the Mineral Resources Law and regulations from the Ministry of Natural Resources, the sand and gravel used for the project’s own construction belonged to “self-produced and self-used,” and “this part does not constitute illegal mining.” As of the time of writing, the application had not received a response.

Outside the courtroom, a discussion regarding legal boundaries was also brewing. At the end of February 2026, lawyers Si Weijiang and Wu Buda mailed a 17-page proposal for record review to the Standing Committee of the National People’s Congress and the Legislative Affairs Commission. The proposal directly pointed to the Supreme Court and the Supreme People’s Procuratorate’s 2016 interpretation regarding the application of law in handling illegal mining criminal cases. In their view, the clause stating “unlicensed mining constitutes a crime” in the interpretation conflicts with the 2024 revised Mineral Resources Law’s provision of “exemption from mining rights,” creating a paradox in judicial practice: companies operate according to regulations and trust government directives but may slip into the vortex of criminal prosecution.

The experience of Xingyuan Company serves as the most lamentable example in this proposal. If the charges are confirmed, this vessel carrying the livelihoods of over 7,000 people may capsize.

The Unexpected Granite

In Fujian Zhangzhou, on the red soil hills of the Huian Economic Development Zone, Lai Jianhui originally envisioned a scene where the elderly could be taken care of.

At that time, Zhengxing Group was already recognized as an industry leader. The actual controller, Lai Jianhui, a native of Pinghe County, Fujian, had made the Hurun Rich List as early as 2008. The Zhengxing Wheel Group he founded is the largest wheel enterprise in Asia and successfully listed on the New York Stock Exchange in 2011. After that, Lai Jianhui diversified, founding three full-time schools and two general hospitals.

“Zhengxing Xinlaifu Town” is a key component of his blueprint. In September 2011, Xingyuan Company, a subsidiary of Zhengxing Group, successfully acquired this 418.05-acre commercial and residential land for 62.70795 million yuan.

However, during the site survey, the romantic blueprint was shattered by harsh reality: the project leader discovered that this was not a level plot, but a hilly area with nearly 20 meters of elevation difference, scattered with hundreds of graves and clusters of fruit trees. The land was handed over in “raw state,” meaning the developer needed to complete “three connections and one leveling” themselves.

Xingyuan Company was working on this type of terrain that year.

After five years of relocation of graves and compensation work, by the second half of 2016, the land finally became suitable for leveling.

In June 2017, the construction team entered the site. The moment the excavator’s iron shovel cut into the surface, the harsh metallic clang shattered the silence. Initially, the construction team thought it was merely isolated boulders, but upon digging deeper, they found an entire block of hard granite underground, far superior to ordinary construction materials, and conventional equipment was utterly inadequate.

What was more troublesome was that the granite was distributed irregularly, further exacerbating the elevation differences of the plot. Without thorough clearing, foundational piling could not proceed. If the investment amount was not completed within the stipulated time, there would be a risk of the government reclaiming the land.

Accustomed to paving the way through the business sea, Lai Jianhui issued a strict order against this hard rock: “No matter the cost, retain the land and push forward construction.”

But this “hard bone” proved to be more challenging than anticipated. The construction team attempted blasting and manual clearing, but the former was costly and posed safety hazards, while the latter was inefficient and could not keep up with the timeline. As excavation deepened, stones surged forth like a tide, with mountains of leftover stones occupying every inch of the construction pathway. By early 2018, the accumulated granite had reached 149,500 cubic meters—enough to fill 70 standard swimming pools.

Granite excavated during construction.

“At first, it could still be used for self-construction, for the project’s foundation and road construction.” The project leader recalled, but as the stones continued to pile up, the entire construction site became congested, vehicles could not pass, and subsequent projects were completely halted.

The reminders from the land office subsequently prompted Xingyuan Company, which had been solely focused on construction, to slow its pace. They were clearly informed that leveling the stones required prior approval and could not proceed independently. At this point, the company realized that the unexpectedly excavated rock mass had exceeded the category of “construction waste,” touching upon the professional red line of mineral resource management.

Four “Passes”

In order to “legalize” the stones, Xingyuan Company demonstrated a strong willingness to comply.

On March 14, 2018, the company formally submitted a report to the Huian County People’s Government, detailing the challenges in land leveling and requesting approval to clear isolated stones and boulders, promising that the cleared stones would be “self-produced and self-used, never sold externally.”

This report garnered significant attention from the county government. Deputy County Head Luo Yongsheng chaired a special meeting, explicitly agreeing to the company’s clearance request and reiterating that “the stones are only for project self-use and must not be sold.”

This meeting minute became the company’s first official “pass.”

In 2018, Xingyuan Company’s report to the government.

However, reality soon shattered the agreement of “self-produced and self-used.” The quantity of stones had far exceeded the needs of the project, and with the increased risk of landslides during the rainy season, the mountain of stones had to find a way out. On July 16, 2018, Xingyuan Company once again applied to the county government, earnestly requesting coordination to resolve the disposal of the remaining stones.

On October 19, 2018, the Huian County Government held its seventh executive meeting, specifically studying the comprehensive utilization of granite from this plot. The meeting accepted the survey results from the Fujian Southeast Geological Team and the assessment report issued by Hubei Huacheng Geological Mining Consulting Co., Ltd.—which determined that the revenue from the granite mining rights transfer was 702,600 yuan—and ultimately decided to “transfer the granite mining rights within this plot for 2 million yuan.”

“We fully complied with the government’s requirements and paid the full amount of 2 million yuan by November 2018.” The evidence presented by the project leader of Xingyuan Company showed that the charging party was the Huian County Mineral Resources Management Station, and the revenue item was “mining rights transfer revenue (Huian County).” In Xingyuan Company’s view, the long-standing problem was finally alleviated, and they began to dispose of the excess granite externally.

In 2018, the meeting minutes from Huian County Government regarding granite disposal.

What followed seemed to enter a cycle of “problem discovery—government meeting—company payment.”

In April 2019, due to the mining volume exceeding expectations, the county government held another meeting and decided to levy 6.18 million yuan from Xingyuan Company for the additional mining rights transfer revenue, as proposed by the county’s Natural Resources Bureau, to “ensure that state-owned assets do not go to waste.”

The company raised no objections and soon remitted 6.18 million yuan. The head of Xingyuan Company stated that for the remaining stones not disposed of, they were auctioned by the town government, with all proceeds, after necessary expenses, going to the town government.

Subsequently, the company dismantled all equipment in the mining area, backfilled the mine, and completed the rectification. On January 7, 2021, the Zhangzhou Natural Resources Bureau, along with the Municipal Water Conservancy Bureau, conducted an inspection and confirmed that “rectification measures were implemented, and the rectification goals were achieved.” As the project progressed in phases, granite continued to be excavated during new land leveling.

In 2021, the county government approved another disposal plan; on May 10, 2022, the county government approved the remaining sand and gravel resources to be auctioned at a base price of 24.38666 million yuan; a month later, Xingyuan Company successfully bid 24.39666 million yuan for those resources and signed a transfer contract with the county’s Natural Resources Bureau, agreeing to an 8-month construction period.

Over four years, the Huian County Government held four meetings or approvals to regulate and permit the granite disposal work, and the company paid a total of over 32 million yuan in mining rights transfer revenue and related fees.

After disposing of the granite, Xingyuan Company provided proof of the fees paid to the government.

The head of Xingyuan Company recalled that during that period, relevant government departments frequently visited the site for inspections and guidance, but no one ever asked for a “mining license.” “Our company has been in operation for 40 years without ever being involved in the mining industry, not even tangentially. So we had no concept of what constitutes mining. When we discovered issues on-site, we reported them to the local government immediately, and we did whatever the government guided us to do, so we never realized there would be any problems. Moreover, commercial and residential land cannot possibly obtain mining licenses anywhere.”

In December 2023, a member of the public reported to the Central Ecological and Environmental Protection Supervision Team, alleging that Zhengxing Group was illegally mining and discharging wastewater in Hongyan Village, Fengshan Town, Huian County, under the pretext of real estate development. The Huian County Government officially responded, stating that “the sand and gravel resources generated from the land leveling of the Huian Xingyuan real estate project were legally disposed of,” and listed 40 related pieces of evidence to support that all operations “were conducted in accordance with the law under the guidance of the county government.”

At that time, Xingyuan Company believed they had safely reached the shore with the backing of the government. In reality, a larger crisis was quietly brewing in the neighboring county.

The Storm

On September 26, 2024, the calm was completely shattered.

The police of Nanjing County, adjacent to Huian County, suddenly took criminal coercive measures against Lin Moubin, who was in charge of granite mining on that plot, and Feng Mouying, who was responsible for sales, on charges of “illegal mining.”

This storm quickly swept through the entire Zhengxing Group. Several senior executives of Xingyuan Company were taken away from their homes or offices, and on October 27, 2024, the actual controller Lai Jianhui was arrested. The case ultimately involved 58 individuals, including senior executives, employees, construction teams, and partners of Xingyuan Company.

“We were completely blindsided. We had been following the government’s directives, all procedures were in order, and we thought we were just going in to clarify the situation,” recalled a senior executive of Xingyuan Company who had been subjected to coercive measures.

The core facts outlined in the indictment are as follows: from July 2018 to the end of December 2023, the defendant unit Xingyuan Company and the actual controllers Lai Jianhui, Feng Xueying, and others, without obtaining mining approval, illegally mined and sold granite on the project site, valued at over 258 million yuan. Among these, from August 2018 to April 2019, the illegal mining and sales amounted to over 171 million yuan; from 2021 to December 2023, the amount was over 86.84 million yuan. The indictment particularly noted that the company even dismantled three villas that had completed their framework for the purpose of mining.

Due to suspected illegal mining, Lai Jianhui was placed under residential surveillance on October 28, 2024, released on bail on January 19, 2025, and placed under bail by the Nanjing County People’s Procuratorate on August 21 of the same year. On November 28, 2025, the procuratorate filed a public prosecution with the Nanjing County People’s Court. The involved funds of 101,349,356 yuan were temporarily withheld by the Nanjing County Public Security Bureau.

From the perspective of the Nanjing County procuratorate, Xingyuan Company illegally mined without obtaining a mining license, violating the provisions of the Mineral Resources Law. As the company’s actual controller, Lai Jianhui was deemed to be directly responsible. The prosecution believed that this behavior had violated the provisions regarding illegal mining in the criminal law, was factually clear, and had sufficient evidence, thus criminal responsibility should be pursued.

Zhengxing Group’s actual controller Lai Jianhui.

This accusation left the company feeling absurd.

“The indictment completely overlooks the four meeting minutes and related approvals from the government, only emphasizing ‘failure to obtain a mining license.’” The company representative explained that the demolition of the villas was due to the designation of an ecological protection blue line by the Zhangzhou Municipal Government in August 2018, which directly crossed the project’s commercial and residential land. Two of those villas were located within the blue line and, according to regulations, had to be demolished—this matter had no relation to illegal mining.

Regarding this case, the former head of the Huian County Natural Resources Bureau who was involved in handling the matter at that time responded to reporters from Phoenix Weekly, saying, “Let’s follow the judicial process!” A staff member from the Nanjing County Court responsible for hearing the case stated on March 16 that the date for Lai Jianhui’s trial had not yet been determined and it was not convenient to comment further.

Crime and Innocence

How to accurately delineate the boundary between “legitimate engineering ancillary activities” and “illegal mining” has become a significant legal dispute in the current criminal justice field concerning mineral resources.

On November 11, 2022, the Supreme People’s Procuratorate released “Typical Cases of the Procuratorial Organs Lawfully Punishing the Crime of Illegally Mining Mineral Resources,” in which “Case Four: The Non-Prosecution Case of Wu Moumou and Ren Moumou for Illegal Mining in Yinan County, Shandong Province” clearly defined the boundary of innocence. The procuratorial organ explicitly recognized that excavation activities based on legitimate engineering construction needs, not for the purpose of illegally obtaining mineral resources, do not possess the objective constituent elements of the crime of illegal mining.

This highly significant benchmark case touches upon the core proposition of current judicial practice: does the engineering ancillary behavior possess criminal illegality?

The construction site from that year.

On November 10, 2025, a company in a certain county in Anhui Province received a non-prosecution decision, marking the formal conclusion of an illegal mining case that lasted nearly two years—this company had exceeded the design scheme in excavation during the ecological restoration of a waste mine pit and sold the materials externally, ultimately resulting in a decision of non-prosecution due to unclear case facts, insufficient evidence, and difficulty in determining subjective intent.

Zhengxing Group’s experience is not an isolated case; in reality, while similar excavation and disposal of sand and gravel occurs, the outcomes of different cases can vary significantly, with the core issue being whether the distinction between engineering ancillary activities and illegal mining is accurately made.

“The key is to distinguish the essential difference between engineering ancillary activities and illegal mining. Many disputes in cases arise from conflating violations of administrative management regulations (which may not even constitute a violation of administrative law) with criminal offenses,” bluntly expressed a former county-level natural resources bureau director. After obtaining land use rights through legal procedures, excavation of sand and gravel is a necessary component of land development; the sand and gravel produced during engineering construction are essentially ancillary products of the project, and no matter how they are disposed of afterward, they should not be evaluated in isolation from the construction purpose—this is also the core standard for distinguishing legitimate construction from illegal mining in mineral resource supervision. This statement accurately aligns with the distinction principles between administrative law and criminal law—administrative violations and criminal offenses are qualitatively different; only when administrative violations reach a certain severity and fully meet the constituent elements of a crime can they be recognized as criminal offenses. It has been observed that in recent years, similar non-guilty or non-prosecution cases are gradually increasing.

Professor Zhou Guangquan from Tsinghua University Law School also expressed similar concerns in “Key Issues of Illegal Mining Crimes.” He pointed out that there exists an “impulse to recognize illegal mining crimes solely based on administrative violations” in judicial practice, a tendency that urgently needs correction; the legal interest protected by the crime of illegal mining is mineral resources and their reasonable utilization, as well as the state’s property ownership over mineral resources. Acts that merely infringe upon mineral resource management systems or management order cannot constitute this crime.

From the perspective of the aforementioned former director, the core subjective constituent element of the crime of illegal mining is “for the purpose of mining”; however, the original intention of engineering construction is for land development, ecological restoration, and other legitimate purposes, while excavation of sand and gravel is merely a necessary step in the implementation of the project, and the two are fundamentally different in nature. He further added that the subjective intent of engineering ancillary excavation versus illegal mining can be comprehensively judged through objective facts such as the scale of excavation, volume, and intended use of the sand and gravel. This distinction logic completely aligns with the principle of unity of subjective and objective elements in criminal law, which should also be a core standard upheld in grassroots law enforcement.

Regarding the disposal of surplus sand and gravel generated from engineering (including ecological restoration), the Ministry of Natural Resources and local administrative management departments have issued numerous normative documents. Among them, the notice titled “On Regulating and Improving Sand and Gravel Mining Management” issued by the Ministry of Natural Resources in 2023 (Natural Resources Document [2023] No. 57, hereinafter referred to as “Document No. 57”) is the key reference repeatedly mentioned by the former director.

He pointed out that this notice is a normative document issued by the Ministry of Natural Resources in accordance with its responsibilities for mineral resource management, possessing clear administrative management effectiveness. It serves as an important guideline for grassroots sand and gravel supervision, distinguishing legitimate disposal from illegal sales, and explicitly states, “The sand and gravel produced due to construction activities within the approved project land (excluding temporary land) can be directly used for the engineering construction without obtaining a mining license.”

This rule not only aligns with the actual situation of grassroots engineering construction but has also been fully verified in the aforementioned judicial precedents.

Of course, this does not imply that all sand mining activities within an engineering context can be exempt from criminal responsibility. Regardless of whether it is disguised as “engineering,” as long as the essence of the behavior is for the purpose of mining, exceeding the necessary scope of the project, and meeting the objective and subjective constituent elements of illegal mining, criminal responsibility must be pursued according to law. In the view of this former director, this indicates that the law protects sincere engineering construction activities, not illegal mining behaviors disguised under the guise of “construction” with the purpose of resource plunder.

“In similar illegal mining cases, the key is to look at two points: whether it exceeds the necessary scope of the project and whether the main purpose is mining.” He further supplemented with typical cases encountered in grassroots law enforcement, such as some entities disguising as “free garbage removal,” while actually excavating river sand and gravel for profit; upon in-depth investigation, if their true purpose is found to be profit-seeking through mining, it should be recognized as illegal mining.

In judicial practice, the evolution of relevant policies also plays a crucial role in case classification.

Document No. 57 shifted the management of engineering sand and gravel from “prior approval” to “post-regulation,” clarifying that self-used sand and gravel for engineering do not require a mining license, and that surplus sand and gravel should be uniformly disposed of by government platforms. This is an optimization and improvement of mineral resource management policies. Furthermore, the newly revised Article 29 of the Mineral Resources Law of the People’s Republic of China states, “In any of the following circumstances, mining rights do not need to be obtained: … (2) Construction project units may excavate sand, stone, and clay that can only be used as ordinary construction materials within the approved working area and construction period due to construction needs.” If enterprises dispose of surplus sand and gravel based on guidance from administrative departments, even if not disposed of through government platforms, according to the principle of protected reliance interests, it does not constitute illegal disposal.

“Even if the case occurred before the implementation of the new law, according to the principle of more lenient application of criminal law, a determination benefiting the defendant should be made.” The aforementioned former director pointed out that the current problem is that some case-handling agencies still cling to the old mindset of “no license equals illegal,” ignoring the evolution of mineral resource management policies and the updates in judicial adjudication logic, as well as the practical situation of grassroots engineering construction and sand and gravel supervision. This is one of the significant reasons leading to misclassification of certain cases.

In his view, many related disputes actually stem from a logical “inversion”—people often infer that the act of excavation constitutes a crime simply because they see profits from the sale of sand and gravel. He emphasized that the crime of illegal mining regulates the excavation behavior itself; sales are merely the disposal phase following excavation, and one cannot deduce the illegality of the excavation behavior based on the profits derived from sales.

This viewpoint is highly consistent with the legal judgment essence of relevant Supreme Court cases, which emphasize that the core of criminal law evaluation is the excavation behavior itself, while issues related to circulation are not within the scope regulated by criminal law.

It is noteworthy that if surplus sand and gravel generated from engineering excavation are not sold through government platforms, can related entities face administrative penalties? The aforementioned former director indicated that currently, there are only principle provisions in the normative documents of the Ministry of Natural Resources, lacking clear higher-level legal basis, and this issue awaits further clarification and refinement by legislative departments.

Xingyuan Company disposed of granite through auction.

A lawyer who had previously handled similar cases mentioned that in such cases, some handling agencies exhibit cognitive biases, preferring to draw conclusions based on simple factual judgments and unwilling to explore the evolution of administrative management policies in depth. They also lack the willingness to verify relevant professional issues with administrative management departments and seek guidance on related knowledge, which is another significant reason leading to misclassification of certain cases.

Professor Zhou Guangquan also stressed the importance of “awareness of illegality” in determining illegal mining crimes. In his view, if a person’s mining activities are carried out under the directives, arrangements, or commissions of local governments for a considerable period, it should be determined that they did not realize, nor could they have realized, that such mining activities were prohibited by criminal law, and a not guilty judgment should be made. According to criminal law theory and judicial practice, this viewpoint not only aligns with the principle of unity of subjective and objective elements in conviction but also fully reflects the restraint principle of criminal law.

“Illegal mining crimes cannot be treated as ‘catch-all crimes,’” emphasized the aforementioned former director, as this would leave honest entrepreneurs at a loss and violate the restraint principle of criminal law, contradicting the direction of “flexible and precise law enforcement” in grassroots mineral resource supervision.

A Long Wait

No. 1608 Beihuan City Road, Xiangcheng District, Zhangzhou City, Fujian Province, is the headquarters of Zhengxing Group.

As a leading private enterprise in Zhangzhou, the company currently has over 7,000 employees, with around 12,000 students enrolled in its three schools, two general hospitals receiving over a million patients annually, and more than 1,000 elderly residents in its nursing homes.

After Lai Jianhui was subjected to criminal coercive measures, this massive commercial empire plunged into unprecedented turmoil.

A middle management employee revealed that during the investigation of the case, rumors ran rampant, claiming the company was going to go bankrupt. Many employees in crucial positions submitted resignations, and core clients began to worry about the stability of their partnerships. “Our partners are all large state-owned enterprises, and competitors took this opportunity to spread rumors that ‘the boss of Zhengxing is going to be sentenced,’ resulting in the loss of many orders.”

To stabilize the situation, after being released on bail, Lai Jianhui immediately convened a group-wide meeting to thoroughly explain the ins and outs of the case. “The boss was very honest, showing everyone all government documents and payment receipts, telling us the company operates legally and will actively respond to the allegations.” Participants recalled that this honesty temporarily calmed the morale, but the dust had yet to settle, and everyone remained concerned about the final judgment.

The place where Lai Jianhui and others were placed under surveillance.

Meanwhile, the storm center of “Zhengxing Xinlaifu Town” has now become a local trendy check-in location.

Among the seven 30-story residential buildings, two have already been delivered for occupancy; the once-mountainous pile of granite has now become community green space. The water pool sparkles, and residents stroll under the sunset. No one can glean from this tranquility the criminal struggle involving 258 million yuan and the fates of 58 individuals.

In December 2025, the related case has already been heard in the Nanjing County Court. However, Lai Jianhui’s trial remains undecided. If convicted, he faces a prison sentence of three to seven years.

According to Si Weijiang, their proposal was received the day after it was sent. As of the time of writing, no response has been received.

Lai Jianhui and his 7,000 employees are still waiting—this disaster triggered by stones is far from over.

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