By Michael Forsythe
Guo Wengui has criticized the effectiveness of the Communist Party’s anti-corruption campaign. It happens in Russia — occasionally.
An oligarch, made fabulously wealthy through the privatization of state assets, breaks ranks, becoming a critic of President Vladimir V. Putin.
China was different.
Its growing ranks of billionaires often owe their fortunes to the good graces of the Communist Party and its leading families.
But the firsthand knowledge that the country’s tycoons might have of the complex shareholding ties that serve to enrich the political elite had stayed secret.
That changed this year.
In two rambling interviews with a New York-based media company lasting more than four hours, Guo Wengui, a real estate magnate, described what he said was a ferocious struggle that culminated two years ago in the collapse of a business deal pitting him against relatives of a retired top Communist Party official, He Guoqiang.
Since then, Mr. Guo has lived abroad, and is a member of Trump’s Mar-a-Lago resort in Florida.
In going public with his charges, Mr. Guo demonstrated just how dangerous a loose-lipped billionaire can be to China’s Communist Party.
The party still strives to cultivate an image of selfless service to the nation, with state-run news media repeatedly emphasizing that no official is immune to Xi Jinping’s anti-corruption drive, now in its fifth year.
If Mr. Guo is to be believed, Xi, when he assumed leadership of the Communist Party in November 2012, may have faced a far more serious corruption problem than has been publicly disclosed, touching not only the departing chief of the country’s security forces but perhaps also the top official in charge of rooting out graft in the party’s own ranks, Mr. He.
Both were members of the Politburo Standing Committee, the elite body that wields supreme power in China.
“If you are Xi Jinping and you are deciding to go after corruption, can you take them on all at once?” asked Andrew Wedeman, a professor of political science at Georgia State University who studies corruption in Chinese politics.
Zhou Yongkang, the former head of the security forces, in court in 2015.
The former head of the security forces, Zhou Yongkang, was prosecuted on graft charges and is now serving a life sentence in prison.
The former head of the security forces, Zhou Yongkang, was prosecuted on graft charges and is now serving a life sentence in prison.
But there is no report that He or members of his family have been prosecuted.
To Mr. Guo, that demonstrates the weakness of the corruption crackdown: Among the elite, the campaign touches only those who are already on the losing side of factional power struggles.
Mr. Guo explained in a March 8 videotaped interview with Mirror Media Group, a Chinese-language news company based on Long Island, how He’s son He Jintao was the “boss” of the second-largest shareholder in Founder Securities, a company in which Mr. Guo was seeking to acquire a large stake.
Mr. Guo explained in a March 8 videotaped interview with Mirror Media Group, a Chinese-language news company based on Long Island, how He’s son He Jintao was the “boss” of the second-largest shareholder in Founder Securities, a company in which Mr. Guo was seeking to acquire a large stake.
He Jintao concealed his role through a proxy, according to Mr. Guo.
That deal soured when Mr. Guo tried, without success, to name directors to Founder Securities’ board and became locked in a dispute with his former business partner, Li You, who was the chief executive of the brokerage’s state-owned parent, according to a report by Caixin, a Chinese news company.
Mr. Guo, using turns of phrase that wouldn’t be out of place in “The Godfather” or “The Sopranos,” said He Jintao was working against him.
“To be honest, if I could publish evidence about you, He Jintao, I promise that in 24 hours, 10 million people will take to the streets and will eat you alive,” Mr. Guo told Mirror Media.
Mr. Guo, who also goes by the name Miles Kwok, did not offer any proof of wrongdoing by the He family.
That deal soured when Mr. Guo tried, without success, to name directors to Founder Securities’ board and became locked in a dispute with his former business partner, Li You, who was the chief executive of the brokerage’s state-owned parent, according to a report by Caixin, a Chinese news company.
Mr. Guo, using turns of phrase that wouldn’t be out of place in “The Godfather” or “The Sopranos,” said He Jintao was working against him.
“To be honest, if I could publish evidence about you, He Jintao, I promise that in 24 hours, 10 million people will take to the streets and will eat you alive,” Mr. Guo told Mirror Media.
Mr. Guo, who also goes by the name Miles Kwok, did not offer any proof of wrongdoing by the He family.
But for all his bluster, there is some documentation to support his assertion that the family had a financial stake in Founder Securities.
In 2015, New York Times reporters working in Beijing, Hong Kong and the southwestern Chinese city of Chengdu mapped out the financial network of He Guoqiang’s family, examining shareholding records and verifying relationships by interviewing a member of the family.
In 2015, New York Times reporters working in Beijing, Hong Kong and the southwestern Chinese city of Chengdu mapped out the financial network of He Guoqiang’s family, examining shareholding records and verifying relationships by interviewing a member of the family.
Those documents and interviews show that the family did appear to control, indirectly through a series of shell companies, a stake in Founder Securities, which has a joint venture in China with Credit Suisse, the Swiss bank.
He Guoqiang, left, with Xi Jinping, center, and Jia Qinglin, a top official, during the Communist Party Congress in 2012.
He Guoqiang, left, with Xi Jinping, center, and Jia Qinglin, a top official, during the Communist Party Congress in 2012.Founder Securities is one of China’s biggest brokerages, with a market capitalization of more than $10 billion.
Unusual for a securities company, it is based in the south-central province of Hunan, He Guoqiang’s native province.
Its second-biggest shareholder at the time of its 2011 initial public offering was a company called Lide Technology Development.
Until at least mid-2014, Chinese company records show, Lide was controlled by companies tied to the He family.
Until at least mid-2014, Chinese company records show, Lide was controlled by companies tied to the He family.
A member of the family identified one of the ultimate shareholders, Zhang Xiuqin, as He Jintao’s maternal aunt.
Lide owns stakes in property, medical and financial companies across China worth more than $600 million, corporate records show.
Credit Suisse Founder, the joint venture, was begun in 2008, the first full year that He Guoqiang was on the Politburo Standing Committee, and it allowed the Swiss bank entry, through the venture, to China’s domestic investment banking market.
Credit Suisse Founder, the joint venture, was begun in 2008, the first full year that He Guoqiang was on the Politburo Standing Committee, and it allowed the Swiss bank entry, through the venture, to China’s domestic investment banking market.
Founder Securities retained majority control, with a two-thirds stake.
According to Bloomberg data, the venture underwrote one of its first initial public offerings in August 2010 — of a company called Hangzhou Shunwang Technology.
According to Bloomberg data, the venture underwrote one of its first initial public offerings in August 2010 — of a company called Hangzhou Shunwang Technology.
One of this company’s directors was Liao Ying, whose name and biography on the company’s prospectus match those of He Jintao’s wife.
Moreover, at the time of the I.P.O., Hangzhou Shunwang’s third-biggest shareholder, owning almost 10 percent, was a company controlled by the He family and ultimately owned by two of its business associates, according to a review of Chinese corporate records.
Moreover, at the time of the I.P.O., Hangzhou Shunwang’s third-biggest shareholder, owning almost 10 percent, was a company controlled by the He family and ultimately owned by two of its business associates, according to a review of Chinese corporate records.
Credit Suisse Founder was also an adviser for Founder Securities’ own I.P.O. in 2011.
A spokeswoman for Credit Suisse in Hong Kong had no comment.
A spokeswoman for Credit Suisse in Hong Kong had no comment.
Founder Securities and Hangzhou Shunwang did not respond to questions submitted via fax and email.
He Jintao did not respond to a request for an interview made through his Beijing-based company, Womei Investment.
With a flourish of bluster and in the third person, Mr. Guo expressed just how heated the conflict was with the younger Mr. He, telling him, via a video interview viewed by hundreds of thousands of people, that more disclosures could come should their business interests clash again.
“Guo Wengui is from the grass roots, born as a farmer and not afraid of death,” Mr. Guo said.
With a flourish of bluster and in the third person, Mr. Guo expressed just how heated the conflict was with the younger Mr. He, telling him, via a video interview viewed by hundreds of thousands of people, that more disclosures could come should their business interests clash again.
“Guo Wengui is from the grass roots, born as a farmer and not afraid of death,” Mr. Guo said.
“If you do it again, then I would have no choice and will fire a cannon to you. I don’t want to war against you, but He Jintao, you had better watch carefully what you say and what you do, including with your wealth — you’ll be responsible for it.”
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