Til Death - Or Prison - Do Us Part
|Jan 12, 2009|
The late December arrest of Du Juan, the wife of Huang Guangyu, China’s richest businessman, points up how often the wives and mistresses of eminent and not-so-eminent Chinese have played key roles in driving their loved ones to enormous wealth – and sometimes to prison.
Huang, formerly chairman of Gome Group, China’s largest consumer electronics retailer, was arrested in late November and is under investigation for insider trading. Du herself was arrested outside Beijing and taken to a police station in the capital, where she is being questioned in connection with economic crimes. Huang was worth US$6.3 billion according to the Hurun Rich List of 2008 at the time of his arrest.
What is reported regularly in the Chinese media – wives or mistresses following their prominent mates into prison for corporate crimes (although there is plenty of man-and-wife conventional crime in the west) is rare enough in the western press to make people scratch their heads. In China, however, this partnership in power goes back at least to the Empress Dowager Cixi (1835-1908), who controlled the country for the last 40 years of the Qing dynasty, acquiring bullion, antiques, jewellery and an estimated £8.5 million sterling in banks in London – although she never left China. Song Mei-ling, wife of President Chiang Kai-shek, amassed a fortune for herself and her family between her marriage to him in 1927 and her death in 2003, at the age of 105.
Du Juan is typical of a new generation of smart, ambitious and well-educated Chinese women who use their charm and beauty to attract men of wealth and power and work together with them to amass a fortune. The most famous is Wendi Deng, the daughter of a modest family, who studied at California State University Northridge and Yale and, after marrying once before, snagged the twice-married media tycoon Rupert Murdoch, 37 years her senior, in June 1999.
The women are a product of one of the great achievements of the Communist era – equality of education for women and a nearly equal place in the workforce, giving them opportunities which their grandmothers never had. “Women hold up half the sky,” Mao Zedong famously said, a statement that to many Chinese women meant they were going to have to shoulder a bigger share of the workload.
(One of those who appear to have shouldered rather too much of the workload is Wu Shu-chen, the wife of disgraced former Taiwan President Chen Shui-bian, who was accused of embezzling NT14.8 million (US$45,000) from a government slush fund using faked documents. In the west, she keeps company with Patti Blagojevich, the wife of impeached Illinois Gov. Rod Blagojevich. She was described in a Chicago Tribune article as a “modern-day Lady Macbeth who plotted against her husband’s perceived enemies and backed his corrupt schemes.”)
In China, the extraordinary growth of the last three decades and the close ties between politics and economic power have created opportunities unparalleled in China’s history for those with access to money, technology and political patronage. And that isn’t to say the men themselves haven’t had plenty to do with it.
The collective Puritanism of the Maoist era has been replaced by a pre-1949 moral order, in which the rich and powerful can acquire many wives, official and unofficial. They can rent a mistress for a year, two years or the long term: everything can be negotiated for a price. Of the 41 minister-level officials convicted of bribery since 2000, 36 had mistresses. The men had an average age of 63, the wives 60 and their mistresses 51.4, with some in their 30s. These are the ideal conditions for women with looks, drive and talent to fulfill their ambitions through their husbands or lovers.
Du was a key player in her husband’s business empire. A graduate in accountancy of the Beijing University of Science and Technology, she met Huang as a loan officer with the Bank of China in Beijing: the two married in 1996. They have three children, each with a nanny. In 2002, she joined the Gome board and was responsible for its Hong Kong operations. Under her name, they bought an apartment in Repulse Bay in November 2005 for 55 million yuan.
In March 2007, Penguin Investment, a company owned by Huang and Du, and an American investment bank each put up US$250 million to expand outside the retail electronics sector, with Du as vice-president in charge of overseas operations and mergers. She resigned from Gome’s board on December 24 and has been barred from leaving China.
Another example is Sandy Mo Yuk-ping, the wife of Shanghai property tycoon Zhou Zhengyi, who was in November 2007 sentenced to 16 years for bribery and embezzlement. In January 2006, Mo was given three years in prison in Hong Kong for manipulating the prices of the shares of her husband’s company.
Zhou and Mo worked closely together to build his empire, which began with a won-ton restaurant in Shanghai in 1978 and grew into restaurants, karaoke bars, trading in stocks and futures and real estate.
Businesswomen have also played a key role in earning a fortune for their lover-officials. Wang Xiaomao, for example, was for 14 years the mistress of Li Baojin, the former chief prosecutor of Tianjin. In December 2007, Li was sentenced to death, commuted for two years, for taking bribes and having income he could not explain. Wang herself received six years for taking bribes and evading taxes, and a fine of 7 million yuan.
Born in Tianjin in 1962, Wang graduated from technical college and met her lover in 1992, when he was the Communist Party chief of the Tianjin police and her brother had been arrested for fraud. That year, she earned for him a bribe of 11 million yuan from a petrochemical firm in the city, of which she received 1.65 million. In 1995, she went into real estate and, after Li became chief prosecutor in 1998, began her ‘eight golden years’. Her company expanded into education, medical equipment, building expressways, pawn-broking, auctioneering and a contract to build a 52-kilometer road for the Olympics. By the time of her arrest, she had 20 companies worth three billion yuan. Her businesses and Li’s bank account grew together.
And, for instance, last August, two former Bank of China executives and their wives were convicted by a federal jury in Las Vegas for orchestrating an elaborate scheme to defraud the bank of US$485 million by laundering the money through Hong Kong, Canada and the US, then immigrating to the US on false identities by sham marriages with naturalized American citizens. According to news reports, evidence also proved that the bank managers’ true wives, Kuang Wan Fang and Yu Ying Yi, assisted their husbands in laundering the proceeds of the fraudulent scheme.
Wives of senior politicians are well-placed to enrich themselves. One suspected of doing so is Zhu Lin, wife of Li Peng, who was Prime Minister from 1988 until 1998 and then head of the national parliament until 2003. Diplomats said that, during foreign visits, Zhu would buy and be given luxury goods, including clothes, shoes and jewellery. She held senior posts at the North China Power Management Bureau and at the Beijing office of the Daya Bay Nuclear Power Station. She has denied any wrongdoing.
Hers is known as the ‘Energy Family’, because her three children hold or held senior positions in major state energy companies.
A survey of the wealth of senior officials and families, commissioned in April 2006 by the State Council, the China Academy of Social Sciences and the party’s Central Discipline Inspection Committee, found that the richest 3,000 children of top officials had assets totaling two trillion yuan, earned from finance, foreign trade, land development, securities and building major projects. The results of the survey were so shocking, in showing a wealth gap larger than in the United States, that the government ordered a ban on publishing it.
In September 2007, Qu Wanxiang, vice minister of supervision, said that China would set up ‘in due time’ a national system in which officials would be required to declare their assets. “The difficulty lies in verifying the authenticity of what officials declare. China’s financial system is not sophisticated enough and bank accounts are not always opened under real names,” he said.