State terrorism

China has a worrying habit of making business leaders disappear
by Sherisse Pham

The mystery of disappearing Chinese tycoons

A TOP EXECUTIVE SUDDENLY DROPPING OFF THE RADAR WOULD BE ALARMING FOR ANY COMPANY. BUT IN CHINA, IT'S BECOME A DISTURBINGLY FAMILIAR SITUATION.
The latest example is Wu Xiaohui, the chairman of a major insurance company that owns the Waldorf Astoria in New York and recently held talks with the Kushner family over a Manhattan office tower.
He is reported to have been detained by authorities on Friday as part of a government investigation. His company, Anbang Insurance Group, said in a short statement that Wu "cannot perform his duties due to personal reasons."
His abrupt absence follows a string of cases in recent years in which business leaders were unceremoniously yanked from their duties by authorities, leaving employees and shareholders in the dark.
In 2015, senior executives from dozens of Chinese companies disappeared. 

Some returned to their posts, others did not.
The driving forces appeared to be Xi Jinping's crackdown on corruption as well as government investigations into China's stunning stock market crash in the summer of 2015.
Last year was relatively quiet, but a new push now seems to be unfolding ahead of an important meeting of China's political elite in the fall. 

Earlier this year, the head of the country's stock market watchdog reportedly vowed to capture more tycoons engaged in market manipulation.
Here are three of the most high-profile cases from the past 18 months:

Nabbed from the Four Seasons
Chinese billionaire Xiao Jianhua was seized from his apartment at the Four Seasons hotel in Hong Kong and taken to mainland China in late January, according to a source familiar with the situation.
Xiao controls the Tomorrow Group, a massive holding company with stakes in banks, insurers and property developers.

Xiao Jianhua

Days after he went missing, a front page ad published in a Hong Kong newspaper muddied the waters by appearing to deny he had been seized.
The statement, which had Xiao's name printed at the bottom, said that he was "recuperating overseas" and hoped to meet with media once he had recovered.
Nearly five months later, it's unclear what's happened to him.

China's Warren Buffett
Chinese conglomerate Fosun Group's investments include Club Med, Cirque de Soleil and Thomas Cook. 

Its chairman, Guo Guangchang, has been dubbed the Warren Buffett of China.
But Guo's fame and fortune did not save him from going missing for several days at the end of 2015. Fosun suspended trading of its shares after his sudden disappearance.

Guo Guangchang

When Guo finally resurfaced, the company said in a statement that he had been assisting officials with investigations.
His brief absence didn't derail Fosun's business. 

The company pulled in $11 billion in revenue last year.

Clothing tycoon
Zhou Chengjian, the billionaire founder of one of China's leading clothing companies, went missing in January last year.
After reports that Zhou had been detained by authorities, his company, Metersbonwe suspended trading of its shares.

Zhou Chengjian

The textile tycoon suddenly returned to work 10 days later.
The company gave no details about his disappearance.

After Failed Talks With Kushner, More Trouble for a Chinese Tycoon

By CHRIS BUCKLEY

Wu Xiaohui, the president and chief executive of the Anbang Insurance Group. Caixin Weekly magazine questioned whether Anbang was as financially robust as the company claimed. 

BEIJING — Wu Xiaohui, the Chinese tycoon who was in failed talks with President Trump’s son-in-law, Jared Kushner, to buy into a skyscraper project in Manhattan, is fighting allegations of financial chicanery and has threatened to sue a Chinese magazine that examined his company’s labyrinthine funding.
The Anbang Insurance Group, which Mr. Wu controls as president and chief executive, said on Sunday that it would take legal action against Caixin Media and its editor in chief, Hu Shuli, after Caixin Weekly magazine questioned whether Anbang was as financially robust as the company claimed.
“Anbang’s shareholder structure is like a maze,” Caixin said in an article published online on Saturday and in print on Monday. 

It said that Anbang’s meteoric growth and acquisitions raised suspicions of financial sleight of hand, including capital injections coming from companies linked to Mr. Wu.
“The left hand has been helping the right hand to inflate capital,” the article said.
Anbang hit back with its own incendiary accusations. 

Caixin is a widely respected economics weekly, and its findings echoed an extensive report on Anbang by The New York Times last year. 

But Anbang suggested on Sunday that Caixin had published its report after failing to squeeze advertising orders and other contributions from Anbang.

According to Anbang, Caixin falsely claimed that Mr. Wu had married three times and “made a series of smears and slanders against our company’s legitimate business activities.” 

The marriage allegation appeared to refer to a report in Caixin in 2015.
Caixin responded to Anbang’s threat to sue with its own threat of litigation. 

On its website on Monday, Caixin said the suggestion that it took on Anbang out of vengefulness was “an attempt at framing with no basis in facts.”
“We strongly condemn the slander in the Anbang statement and reserve the right to take legal recourse,” Caixin said. 

A director of communications at Caixin, Ma Ling, declined to answer questions and referred to the online statement.
Caixin’s latest report on Anbang has been part of a burst of unwelcome attention for the company and Mr. Wu, which has thrown into doubt his business acumen and his reputation for political invulnerability.
“The level of detail that is provided in the article is, I think, relatively unique for any type of story of a Chinese company in Chinese media,” Christopher Balding, an associate professor at the Peking University HSBC Business School in the southern Chinese city of Shenzhen, said by telephone.
A lawsuit would pit a company that has recently appeared politically vulnerable against a magazine that has proved skilled at navigating censorship to report on corruption and financial shenanigans in China.
The controversy over Anbang has come while the Chinese Communist Party government under Xi Jinping is seeking stability ahead of a leadership turnover later this year. 

But Xi also vowed in late April to rid China’s banks, insurers and other financial companies of excessive risk. 

Last month, Xiang Junbo, the chief regulator of Chinese insurers, including Anbang, was put under investigation by party anticorruption investigators.
The questions raised by the article, and by the possibility of a lawsuit, may test whether the desire for stability will outweigh the government’s vows to take on nettlesome financial issues.
“Anbang is definitely a little bit more extreme and more aggressive than other Chinese insurance companies,” Mr. Balding said. 

“But at the same time, if you look at the finances of the insurance industry at large, and at individual insurance companies, their revenue and building and things like that were exploding by just astounding rates in the past few years.”

The headquarters of Anbang in Beijing. Its meteoric growth and acquisitions have raised suspicions of financial sleight of hand, Caixin Weekly magazine said.

Guo Wengui, a Chinese businessman who fled abroad, has added to the recent jitters in Beijing by publicizing allegations of corruption reaching into the party elite. 

Mr. Guo has also clashed with Caixin.
Mr. Wu’s family and personal ties are at the heart of the growing questions about Anbang, which he co-founded in 2004.
He has been a member by marriage of China’s political and business aristocracy: He married a granddaughter of Deng Xiaoping, the Communist patriarch who oversaw China’s market reforms in the 1980s. 

Mr. Wu also came close to sealing a partnership with American political royalty through Mr. Kushner, the New York developer who is a son-in-law and adviser of Mr. Trump.
Anbang was in talks with Mr. Kushner’s family company to pay $400 million for a stake in a flagship skyscraper on Fifth Avenue in Manhattan. 

Anbang bought the Waldorf Astoria hotel, a popular venue on the New York social calendar, in 2014 as part of a spree of acquisitions.
But the deal with Mr. Kushner’s company foundered in March, in the wake of growing controversy about a presidential in-law doing business with a Chinese conglomerate with many ties to Beijing’s political elite. 

Mr. Kushner has also become an influential White House adviser to Mr. Trump, including on China policy.
Anbang’s international luster had already dulled after it withdrew an application last year to buy an Iowa insurer, Fidelity & Guaranty Life, and also shelved a $14 billion bid to buy Starwood Hotels and Resorts. 

Before those deals foundered, American investors and regulators raised doubts about Anbang’s opaque ownership and its financial strength.
Now Caixin has laid out similar doubts for its readers. 

The Chinese news media had already raised questions about Anbang’s spending spree, but Caixin stepped into more sensitive territory by examining the group’s ownership and accounts in painstaking detail.
In 18 months from October 2014, Caixin estimated, Anbang had spent $16 billion on overseas acquisitions. 

But Caixin also said Anbang’s successive injections of capital, which have helped finance these deals, appeared to often involve companies linked to Mr. Wu’s relatives and associates, raising the possibility that they were not real injections by outside investors.
Anbang appeared to have “used circular injections of funding to magnify its capital,” the report said.
The Caixin report said those doubts were reinforced by Anbang’s complicated ownership. 

Many of those companies registered under obscure addresses, with little capital registered in their names, and often they were formed in clusters shortly before they bought into Anbang — findings that echo the Times report. 

The names, addresses and other details of dozens of people registered as holding shares suggested that they were Mr. Wu’s relatives and associates.
Until recent days, Anbang was mostly silent about the reports on Mr. Wu and the group’s finances, including internet-born rumors that he had been held as part of a criminal investigation. 

No Chinese officials have said anything to suggest that Mr. Wu was detained or under investigation.
But since late last week the company has fought back. 

Anbang issued a statement on Friday that it had sufficient cash flows; it told a Chinese newspaper that rumors that Mr. Wu was in detention were false; and Mr. Wu gave an interview to another Chinese newspaper, The Beijing News, that also seemed intended to squash the rumors.
Mr. Wu said in the interview that Anbang was especially enthusiastic about Xi’s plan to expand Chinese investment and construction abroad in a much-promoted plan called “One Belt, One Road.” Now investors and political analysts will watch to see whether Xi’s government takes sides in the dispute between Anbang and Caixin.
“Hu Shuli and Caixin have done an amazing job carving out a space for honest and incisive reporting in China’s heavily censored media,” Victor Shih, a professor at the University of California, San Diego, who studies finance and politics in China, said by email. 

“Caixin will need all of its savvy to navigate the Anbang lawsuit though.”

Sino-American Crony Capitalism

• Trump princelings profit from political links just like China and Vietnam
• Trump's son-in-law, who is named senior White House advisor to incoming president, is involved in property deals with China's Anbang Insurance

By Johan Nylander
Connections are king in Trump Dynasty. Donald Trump speaks as his son-in-law Jared Kushner and his daughter Ivanka listen. 

The Chinese business elite’s close ties with the top leaders of the Communist Party of China is an open secret. 

Now, is the White House playing the same game of crony capitalism?
Donald Trump’s son-in-law, Jared Kushner, has just been appointed as senior advisor to the incoming president while he at the same time is tangled up in business deals with one of China’s most shadowy businessmen.
The 36-year-old, heir to his family’s privately held multibillion-dollar real estate firm Kushner Companies, has been working for several months on a Manhattan property deal with Chinese investment giant Anbang Insurance. 

Kushner has met with its chairman Wu Xiaohui after the presidential election, The New York Times exposed during the weekend.
Anbang first came to global fame when it bought New York’s legendary Waldorf Astoria hotel in 2014 for almost US$2 billion. 

Wu, on the other hand, has been walking in the shadows and has never given a single press conference. 

Anbang, founded in 2004 and today one of the country’s most influential companies, is also being described as having close ties to the Communist Party and an impressive list of politically connected directors.
The negotiations between Kushner and Wu are reportedly about Anbang’s investment in the redevelopment of 666 Fifth Avenue, which the Times calls “the fading crown jewel of the Kushner family real-estate empire.” 

It writes:
“On the night of Nov. 16, a group of executives gathered in a private dining room of the restaurant La Chine at the Waldorf Astoria hotel in Midtown Manhattan. 

The table was laden with Chinese delicacies and $2,100 bottles of Château Lafite Rothschild. 

At one end sat Wu Xiaohui, the chairman of the Waldorf’s owner, Anbang Insurance Group, a Chinese financial behemoth with estimated assets of $285 billion and an ownership structure shrouded in mystery. 

Close by sat Jared Kushner, a major New York real estate investor whose father-in-law, Donald J. Trump, had just been elected president of the United States.”
During the meeting, Wu expressed his desire to meet with the president-elect. 

The report also described how Kushner has emerged as an important figure for some of America’s most complicated diplomatic relationships, including with China.
This week it emerged that Kushner, who is married to Trump’s daughter Ivanka, will become a senior White House advisor working on trade and the Middle East.
It’s a rare case of a close presidential family member taking a major job, and was labeled by Norman Eisen, who served as Barack Obama’s government ethics lawyer, as a “murky legal landscape” when it came to the anti-nepotism law.
“The Donald Trump administration may show the world that America can do princelings profiting from political connections at least as well as China can,” commented Bill Bishop, a Washington-based expert on Chinese business and author of the influential Sinocism China Newsletter.
“Beijing must be confused by the mixed signals coming from Trump world. On the one hand, there are threats of sanctions and a trade war, and several personnel appointments to make those threats look real. On the other hand, his son-in-law and top advisor is reliant on Chinese investors and still negotiating deals with them since the election.”
Reuters said Kushner would resign from his positions as chief executive of the Kushner Companies and as publisher of the New York Observer newspaper, as well as divest from any interests in the New York Observer, Thrive Capital, the 666 Fifth Avenue office building in midtown Manhattan and any foreign investments.
The Times article, however, highlighted the “ethical thicket he would have to navigate while advising his father-in-law on policy that could affect his bottom line.”
Founded in 2004, Anbang Insurance Group has grown rapidly and has total assets exceeding 800 billion yuan (US$115 billion), according to its website. 

Its ownership structure is however foggy. 

Wu does not appear in Anbang’s filings as an owner, but The New York Times said in September that a number of the company’s shareholders are relatives and acquaintances of the chairman.
Wu Xiaohui is considered to have substantial political ties, and is married to the granddaughter of Deng Xiaoping, China’s former de facto leader. 

He also has close links to Chen Xiaolu, son of Chen Yi, a top military commander under Mao Zedong.
“In many ways, Anbang and Mr Wu appear to be archetypal products of China’s mix of freewheeling capitalism and Communist Party dominance, a formula that has fueled nearly four decades of untrammeled growth,” the Times said.
If the true ownership of Anbang is unknown, who was Trump’s son-in-law and senior advisor actually trying to strike a deal with?