First up, the headline story from CNN, December 1:
Two Chinese business executives at companies controlled by the embattled financial conglomerate Zhongzhi have gone missing, according to statements by their respective firms.
The development comes just days after Chinese authorities launched a criminal investigation into the troubled shadow bank, one of China’s largest. Last week, Zhongzhi told its investors that it is “severely insolvent.”
Dalian My Gym Education Technology, a listed education firm, said it is unable to get in touch with its chairwoman Ma Hongying.
“The company is not sure of the specific reason why it cannot get in touch with Ms. Ma Hongying,” the company said in a filing to the Shenzhen Stock Exchange on Thursday.
On the same day, Xinjiang Tianshan Animal Husbandry Bio-engineering, which breeds cattle and dairy cows in the Xinjiang region, said it had lost touch with its chairman Ma Changshui.
Both companies are controlled by Zhongzhi’s investment units, and the missing executives have been connected with the conglomerate for years....
....MUCH MORE
November 28: Shadow Bank? "Zhongzhi collapse could be bigger than Evergrande’s"
November 26: "China wealth manager Zhongzhi flags insolvency, $64 billion in liabilities"
And from
China’s Failure of Governance: Why the Police Move In
It has become standard practice: Prominent Chinese business leaders who openly criticize the government suddenly disappear or are imprisoned. The latest example is the arrest of Evergrande’s Chairman. The move exposes the Communist Party’s weaknesses in dealing with the real estate giant and other corporate behemoths.
China recently detained the chairman of the country’s erstwhile largest developer, Evergrande, and thus finally got control of the real estate giant. Its chairman, Hui Ka Yan, is the froward child of Chinese industry and has run amok in the markets for 15 years. Arresting him was a sad sign of the weakness of Chinese governance.
It took accusing Hui Ka Yan of «illegal crimes» to curb Evergrande, a company that for two decades has been the greatest co-dependent of the Chinese real estate bubble. Detaining billionaires and then sentencing them to prison has become standard practice.
Other detainees include the power broker who founded China Renaissance, a listed investment bank; Guo Guangchang, the chairman of Fosun, who had been hailed as «China’s Warren Buffett;» the real estate tycoon Ren Zhiqiang; Sun Dawu, who ran China’s largest private agricultural company, and many more.
Impotent Regulators
What is striking about these disappearances and, in some cases, criminal prosecutions, is that the normal channels of Chinese governance do not seem to be effective when faced with private financial empires. Insurance and financial regulators, for example, could not control the profligate borrowing of Anbang Group and instead detained its chairman, jailed him for eighteen years, and doled out the company’s assets to loyal stewards.
Regulators could not control the Tomorrow Group, and its chairman was instead kidnapped in Hong Kong in 2017. He was not heard from again for five years, when he was sentenced to prison and again, assets confiscated. His thirteen-year sentence might actually look attractive compared to what happened to the chairman of another mysterious financial enterprise, the HNA Group: its chairman died when he fell off a wall in France.
Something of the same dynamic governed the mysterious disappearance of Alibaba then-Chairman Jack Ma following a speech in Shanghai in 2020 where he criticized the government. He reappeared after Alibaba pledged billions in support for the Chinese government’s «Common Prosperity» initiative. Like Tencent, Xiaomi, Meituan, and other tech companies, Alibaba has paid hundreds of millions of dollars not in taxes but in «donations» to these vague programs....
....MUCH MORE
