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Tabloid days in China

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Just another day in business and politics in China. Here are two of today’s stories from Caixin, a highly respected business magazine:

COMPANY CHAIRMAN COMMITS SUICIDE AFTER MARKET ROUT

Rumors and accusations are swirling around Chinese ventilation system manufacturer Zhejiang Jindun Fans.

  • Zhou Jiancan 周建灿, the company’s chairman, jumped to his death on January 30, according to Caixin’s report.
  • That week was “the worst for Chinese mainland stocks in 14 months,” with a market rout “due to profit warnings for small caps, and sell-offs triggered by renewed concerns over tighter regulations on risky investment by trusts.” Rumors immediately circulated that Zhou killed himself because of failed stock investments.
  • Zhou borrowed 4 billion yuan ($637 million) to buy shares of the highly indebted company LeEco, according to one rumor. Started as an online video platform, LeEco grew quickly, racking up debt to launch companies making — or rather failing to make — everything from drones to autonomous cars.
  • Zhejiang Jindun Fans has accused an affiliate — Zhejiang Jindun Holding Group — of fabricating company seals (used to sign checks or contracts) to borrow money or guarantee loans, although it “could not confirm the number of loans involved or the total amount borrowed.”
  • The company did not say if Zhou was involved in the alleged fraud, but it said that his son is left holding a stake of around 26 percent in the company. However, most of these shares have been pledged as collateral for securities companies and other lenders.
  • Police are investigating.

THE MISTRESS WHO RULED CHONGQING

That is the headline of another Caixin story, connected to the fall of former Chongqing Party boss Sun Zhengcai 孙政才, who was expelled from the Party in September, and accused of political and disciplinary violations and corruption.

  • Liu Fengzhou 刘凤州, a government employee turned entrepreneur, art collector, and Buddhist, started a relationship with Sun in the 1990s, and “their ‘special relationship’ evolved quickly,” according to Caixin’s sources.
  • Anti-corruption officers from the Central Commission for Discipline Inspection (CCDI) took Liu in for questioning in May. Shortly after that, CCDI began investigating Sun for “serious violations of party discipline,” including allegations that he “exchanged power for sex.”
  • Sun awarded infrastructure tenders to Liu’s associates in Chongqing, and she started 17 companies in Beijing, Jilin Province, and Chongqing, all localities where Sun had held office.
  • There’s a short bio and some links about Liu on Baidu Baike (in Chinese).

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Jeremy Goldkorn

Jeremy Goldkorn is co-founder of the Sinica Podcast and currently edits SupChina and its daily newsletter.