Crony Capitalism Comes To China - Ex Central Bank Chief's Son-In-Law In Insider-Trading Scandal
As China's anti-corruption crackdown continues, the crony-capitalists are slowly exposed. As EJ Insight reports, the son-in-law of former PBOC governor and former Tianjin mayor Dai Xianglong bought millions of dollars of shares (via offshore entities) ahead of Beijing's decision to allow mainland residents buy Hong Kong stocks directly.
BREAKING: Son-in-law of ex-China central bank chief Dai bought massive Hong Kong stocks via offshore firms - Ming Pao pic.twitter.com/d4SJ0w6K95
— George Chen (@george_chen) July 7, 2014
The son-in-law of former Tianjin mayor Dai Xianglong spent millions of Hong Kong dollars buying shares in the special administrative region one year before Beijing announced in August, 2007 plans to pilot its “through train” scheme to let mainland residents buy Hong Kong stocks directly.
According to an investigation by Ming Pao Daily and the International Consortium of Investigative Journalists, Che Fung bought nearly HK$100 million worth of Hi Sun Technology (00818.HK) shares at HK$1.46 apiece in March 2006 through his wholly owned BVI vehicle Ever Union. A month later, Hi Sun announced a one-to-four share subdivision.
Che sold some of the shares in December 2006, creaming off HK$240 million after costs, the report said. Che still has 90 million shares in the company.
The announcement of the “through train” plan helped drive the Hang Seng index to a record in October 2007, with Hi Sun’s shares climbing to HK$3.50, the report said. Then-premier Wen Jiabao said in November that year that the government needed to study the risks before going ahead with the plan. Beijing official scrapped it in January, 2010.
Hong Kong exchange data showed that Ever Union has HK$1.4 billion combined shares in Hi Sun, MI Energy Corp. (01555.HK) and Digital Domain (00547.HK).
Ever Union’s office in Hong Kong’s International Finance Centre did not respond to a written inquiry from Ming Pao.
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The question is - what will they do about it?
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