Good for Alibaba? SCMP Quashes Column on Xi-linked Tycoon

The steady erosion of the journalistic independence of the South China Morning Post, once the region’s most influential English-language daily, was demonstrated last week when the paper’s editors pulled an article linking an investor in Hong Kong’s Peninsula Hotel Group to Chinese President Xi Jinping’s chief of staff.

The article, by long-time Money Matters columnist Shirley Yam, dealt with Chua Hwa Por, who in a series of transactions since late June had taken 11.79 percent of the fabled hotel group, controlled by the Kadoorie family since 1928. The group operates 10 five-star super luxury hotels across Asia, Europe and the United States.

“What Chua has underestimated is the interest in himself that the deal has stirred up,” Yam wrote. Although Chua has generally identified himself as a “Singaporean businessman,” she gave considerable detail to identify him as a so-called China Princeling, linked to Li Qianxin, the daughter of Li Zhanshu, director of the General Office of the Communist Party and the chief of the General Office of the National Security Commission.

Yam called Li “one of the most powerful men in the Communist Party [who] could be on the path to promotion when the party meets this autumn to pick their leaders for the next five years.” Her reporting indicated that Chua and his mother owned property worth tens of millions of US dollars in Hong Kong.

The article seemingly raised questions – without saying it directly – about how relatives of an official close to Xi himself could get so rich given that Xi, after coming to power in 2012, launched the biggest corruption crackdown in Chinese modern history. So far it has taken down at least 120 high-ranking officials including a dozen PLA officers, five national leaders and more than 100,000 rank-and-file party officials who have been indicted for corruption.

The South China Morning Post took the story down from its website and issued the following apology: “The SCMP’s senior editors have concluded that the commentary piece published on July 18th (online) and 19th (in print) “How’s the Singaporean investor in the Peninsula’s holding company linked to Xi Jinping’s right-hand man?”, on further examination, does not meet our standards for publication because it includes multiple unverifiable insinuations. We apologize to our readers for this regrettable misstep, and will examine and improve our editorial process as a result.”

Although the newspaper has never been identified as a crusading publication, it nonetheless historically has been looked upon as providing solid, extensive coverage of China. But that reputation took a steep downward turn in December 2015, when the Alibaba Group, headed by Alibaba founder Jack Ma, announced it had agreed to buy the media assets of the SCMP Group. Alibaba said it was buying the paper, formerly owned by Malaysian sugar king Robert Kuok, to nullify what company executives called the “negative” portrayal of China in the Western media.

‘Good for Alibaba’

In a remark that has gained considerable attention, Joseph C. Tsai, Alibaba’s executive vice chairman, was quoted as saying “What’s good for China is also good for Alibaba,” echoing a phrase attributed incorrectly to “Engine Charlie” Wilson, the former head of General Motors: “What’s good for GM is good for America.”

The effect was immediate, with laudatory stories about Ma himself appearing on the front page of the paper. And while Alibaba executives told the media the Chinese government had no role in the newspaper deal, aggressive coverage of China has fallen off sharply except when it prints stories designed to bring down factional adversaries of Xi Jinping himself.

Yam’s article was clearly on the wrong side of that fence. She identified Chu as owning a race horse named “Limitless” valued at more than £1 million, a HK$120 million bungalow in the village of Stanley on Hong Kong island, a HK$500 million office on the top floor of The Center, in the city’s commercial district, and a listed company.

That appears to have been too much for the SCMP’s editors. The story disappeared. However, it has been given to Asia Sentinel. It can be read here:

How’s the ‘Singaporean’ investor in The Peninsula’s holding company linked to Xi Jinping’s right-hand man?

When Chua Hwa Por (蔡華波) began buying a stake in Hong Kong & Shanghai Hotels – the holding company of The Peninsula – early this year, he could not have imagined the troubles that would follow.

It was supposed to be just another item on a routine shopping list that most princelings, or well-connected ones from mainland China must have, to begin their Hong Kong venture.

The 32-year-old already owns a race horse called Limitless at more than £1 million (HK$9.63 million), a HK$120 million (US$15 million) bungalow in Stanley, a HK$500 million office on the top floor of The Center, and a listed company to build his empire with. So the luxury hotel group controlled by the Kadoorie family is just another prime asset to park his spare cash in.

Since late June, Chua’s stake has gradually climbed from below 5 per cent to 11.79 per cent, costing an estimated HK$1.5 billion. He didn’t even bother to hide behind an investment group or fund.

What Chua has underestimated is the interest in himself that the deal has stirred up.

In his regulatory filing, Chua portrayed himself as a Singaporean with nine years’ experience in investment. But his wealth was too vast, and his Zhejiang accent didn’t quite jive with someone from Lion City.

A Hong Kong magazine tailed him for days before reporting last week that Chua had filed the same residential address on Stanley Beach Road as a woman named Li Qianxin (栗潛心), through a company called Chua & Li Membership. Li owns the house via a company called Century Joy, according to Company Registry and Land Registry records, obtained by Money Matters.

The woman’s Chinese surname is rare, so rare in fact that it’s not even among the 100 most-used family names for the entire Chinese population. You’ll have to look to number 249 to find the surname, used among just an estimated 300,000 people in the entire country.

This is an illustrious clan, with prime ministers and high officials through the centuries. The most famous, and highest-ranking Li out of the current clan, would be Li Zhanshu (栗戰書), the right-hand man to the Chinese president Xi Jinping.

His job titles are Director of the General Office of the Communist Party and the Chief of the General Office of the National Security Commission, roughly equivalent to the Chief of Staff in the US government. He’s one of the most powerful men in the Communist Party and could be on the path to promotion when the party meets this autumn to pick their leaders for the next five years.

A property at 6 Stanley Beach Road, Stanley, is registered in Chua’s name

On paper, Li Qianxin’s name looks the same as Li Zhanshu’s daughter. How is Chua, who owns 73.7 per cent of Tai United Holdings Ltd., related to an up-and-coming Chinese state leader?

According to Tai United staff, madam Li had been seen at the company on at least two occasions giving instructions to employees. Neither he nor the company would respond to queries.

Instead, Chua resigned as Tai United’s chairman and executive director on July 11, citing other business engagement immediately followed the press revelation.

Three days after his resignation, Chua and Li left for Beijing on a 7 am flight, sources said, and have not been seen since in Hong Kong. Meanwhile, Chua’s purchase of shares in Hong Kong & Shanghai Hotels came to a halt as of July 10, the day before he resigned from Tai United’s board.

You may find these reactions comical. Yet, with a few months to go before the Communist Party picks its leaders, it’s not hard to imagine everybody on tippy toes, or the political shock caused by the revelation.

In Xi’s anti-corruption campaign, whoever that’s aiming for the next leadership role will not want to be seen, or even to be rumoured, as the father of a fat cat.

Whether Chua is indeed a princeling can’t be verified except through his own mouth, but he did command enough clout to transform Tai United from a distributor of medical devices into a financial powerhouse. Its business description now says it’s in distressed assets management, tungsten mining, commodities and securities trading. It also owns two real estate projects in London.

That was the result of a HK$3.5 billion investment spree funded by his HK$3 billion investment and HK$1.3 billion in lending by financial firms including Haitong Securities.

That was only a third of the HK$10 billion investment plan that Tai United had pledged. Among them was the acquisition of a financial company in China.

Tai United’s management team comprises chairman Meng Zhaoyi, who used to head the property insurance division at the People’s Bank of China and had worked at Taiping Insurance.

Ye Fei the senior vice president is a former vice president at Taiping Life Insurance while Xu Ke the executive director used to work for China Cinda Asset Management.

This is not a team that any ordinary Singaporean private entrepreneur could muster.