For much of the last decade, while Bo Xilai, Communist Party chief in the city of Chongqing, a large metropolis with province status, and a member of the Politburo, was busy moving up the ranks of the Communist Party, and even striking populist themes aimed at improving the lot of the poor, his relatives were quietly amassing a fortune estimated at more than $160 million. His elder brother accumulated millions of dollars’ worth of shares in one of the country’s biggest state-owned conglomerates. His sister-in-law owns a significant stake in a printing company she started that was recently valued at $400 million. And even Mr. Bo’s 24-year-old son, now studying at Harvard, got into business in 2010, registering a technology company with $320,000 in start-up capital.
Just a few weeks before his fall from power, Bo Xilai wrote an inscription in calligraphy, praising the Chongqing Water Assets Management Company, and urging support for its operations. What he did not say was that a foundation controlled by his younger brother, Bo Xicheng, had acquired a stake in a subsidiary of the water company. Mr. Bo had done something similar in 2003, while serving as governor here in Liaoning Province. He said his province would make supporting the Dalian Daxian company, a conglomerate engaged primarily in electronics manufacturing, one of the most important tasks of the next five years. A few years earlier, another company controlled by the same younger brother was listed as the owner of nearly a million shares in Dalian Daxian, worth about $1.2 million.
Bo Xilai’s downfall has cast the spotlight on the hidden wealth and power accumulated by the Communist Party’s revolutionary families, and by the sons, daughters, wives and close relatives of the nation’s high-ranking leaders. Two of Bo Xilai’s three brothers are well-established businessmen with close ties to state companies.
His elder brother, Bo Xiyong, 64, has invested over the years, according to Hong Kong records, in a series of offshore investment vehicles like Advanced Technology and Economic Development, partly owned by a British Virgin Islands entity, and Far Eastern Industries. But little about the companies is publicly available. Bo Xiyong is also vice chairman of China Everbright International, a division of the Everbright Group, a giant state-owned company. His annual salary is about $200,000 and his stake in the company during the past decade is about $10 million, based on shares he has sold and the value of his current stock options, according to public filings. In addition, Bo Xiyong is a deputy of the Chinese People’s Political Consultative Conference, a government advisory body, and until recently he served as deputy chairman of HKC Holdings, a Hong Kong company controlled by the family of an Indonesian billionaire. In 2010, the big American private equity firm TPG invested about $25 million in HKC, which specializes in infrastructure and alternative energy projects in China and has won numerous state contracts.
Bo Xicheng, the younger brother, Bo Xicheng has served as a director of several big state-owned companies, including Citic Securities, one of China’s largest investment houses. He is also the founder of a small company that makes fire extinguishers and other equipment, called Beijing Liuhean Firefighting Science and Technology, whose products are used in government agencies, luxury hotels, power plants and in Tiananmen Square in Beijing. He has ties to several companies that operated in Dalian and Chongqing, the two cities where Bo Xilai served as a high-ranking official. His charitable foundation, the Beijing Xingda Educational Foundation, has on its board of directors the heads of two real estate developers, the Dalian Huanan Group and Chongqing Tianyou, as well as Weng Zhenjie, the chief executive of the Chongqing International Trust Company. Among the advisers to the foundation, which has already raised more than $20 million, are two academics from the Chinese Academy of Social Sciences who publicly supported Bo Xilai’s “Chongqing model” of development. The foundation owns a $2 million stake in Chongqing Water Group, a company now valued at about $5 billion.
Two of Bo Xilai sisters-in-law - Gu Wangjiang and Gu Wangning - have earned millions of dollars in publishing, real estate and other ventures. Together they own about $120 million worth of shares in the TungKong Security Printing Company in eastern China. The TungKong Web site says the company has contracts with some of China’s biggest state-owned enterprises and government agencies, including the tax authorities and the Central Bank. Gu Wangning also helped Bo Guagua establish a technology company in Beijing in 2010.
Bo Zhiyue, a senior fellow at the National University of Singapore’s East Asian Institute. “The relatives of other party leaders are also doing lots of business deals, and people will begin to ask: What about them? Was the Bo family the only one doing this kind of thing?”
They are conduits of power. Laurence Brahm, a former lawyer who has written books on China’s economy and political scene explained “By virtue of the fact that they are a son or daughter of someone, when they visit the provinces they’ll get red carpet treatment from the leaders there. The businesspeople can tag along.”
http://www.nytimes.com/2012/04/24/world/asia/bo-xilais-relatives-wealth-is-under-scrutiny.html?pagewanted=1&_r=1&nl=todaysheadlines&emc=edit_th_20120424
Just a few weeks before his fall from power, Bo Xilai wrote an inscription in calligraphy, praising the Chongqing Water Assets Management Company, and urging support for its operations. What he did not say was that a foundation controlled by his younger brother, Bo Xicheng, had acquired a stake in a subsidiary of the water company. Mr. Bo had done something similar in 2003, while serving as governor here in Liaoning Province. He said his province would make supporting the Dalian Daxian company, a conglomerate engaged primarily in electronics manufacturing, one of the most important tasks of the next five years. A few years earlier, another company controlled by the same younger brother was listed as the owner of nearly a million shares in Dalian Daxian, worth about $1.2 million.
Bo Xilai’s downfall has cast the spotlight on the hidden wealth and power accumulated by the Communist Party’s revolutionary families, and by the sons, daughters, wives and close relatives of the nation’s high-ranking leaders. Two of Bo Xilai’s three brothers are well-established businessmen with close ties to state companies.
His elder brother, Bo Xiyong, 64, has invested over the years, according to Hong Kong records, in a series of offshore investment vehicles like Advanced Technology and Economic Development, partly owned by a British Virgin Islands entity, and Far Eastern Industries. But little about the companies is publicly available. Bo Xiyong is also vice chairman of China Everbright International, a division of the Everbright Group, a giant state-owned company. His annual salary is about $200,000 and his stake in the company during the past decade is about $10 million, based on shares he has sold and the value of his current stock options, according to public filings. In addition, Bo Xiyong is a deputy of the Chinese People’s Political Consultative Conference, a government advisory body, and until recently he served as deputy chairman of HKC Holdings, a Hong Kong company controlled by the family of an Indonesian billionaire. In 2010, the big American private equity firm TPG invested about $25 million in HKC, which specializes in infrastructure and alternative energy projects in China and has won numerous state contracts.
Bo Xicheng, the younger brother, Bo Xicheng has served as a director of several big state-owned companies, including Citic Securities, one of China’s largest investment houses. He is also the founder of a small company that makes fire extinguishers and other equipment, called Beijing Liuhean Firefighting Science and Technology, whose products are used in government agencies, luxury hotels, power plants and in Tiananmen Square in Beijing. He has ties to several companies that operated in Dalian and Chongqing, the two cities where Bo Xilai served as a high-ranking official. His charitable foundation, the Beijing Xingda Educational Foundation, has on its board of directors the heads of two real estate developers, the Dalian Huanan Group and Chongqing Tianyou, as well as Weng Zhenjie, the chief executive of the Chongqing International Trust Company. Among the advisers to the foundation, which has already raised more than $20 million, are two academics from the Chinese Academy of Social Sciences who publicly supported Bo Xilai’s “Chongqing model” of development. The foundation owns a $2 million stake in Chongqing Water Group, a company now valued at about $5 billion.
Two of Bo Xilai sisters-in-law - Gu Wangjiang and Gu Wangning - have earned millions of dollars in publishing, real estate and other ventures. Together they own about $120 million worth of shares in the TungKong Security Printing Company in eastern China. The TungKong Web site says the company has contracts with some of China’s biggest state-owned enterprises and government agencies, including the tax authorities and the Central Bank. Gu Wangning also helped Bo Guagua establish a technology company in Beijing in 2010.
Bo Zhiyue, a senior fellow at the National University of Singapore’s East Asian Institute. “The relatives of other party leaders are also doing lots of business deals, and people will begin to ask: What about them? Was the Bo family the only one doing this kind of thing?”
They are conduits of power. Laurence Brahm, a former lawyer who has written books on China’s economy and political scene explained “By virtue of the fact that they are a son or daughter of someone, when they visit the provinces they’ll get red carpet treatment from the leaders there. The businesspeople can tag along.”
http://www.nytimes.com/2012/04/24/world/asia/bo-xilais-relatives-wealth-is-under-scrutiny.html?pagewanted=1&_r=1&nl=todaysheadlines&emc=edit_th_20120424
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