Secret wealth of former President Jiang’s family

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In recent weeks, as the world is weighing sanctions on the Chinese Communist Party leadership, when and how to freeze and confiscate the overseas assets of high-ranking CCP officials has been put on the agenda of the newly founded New Federal State of China, especially the illegitimate wealth owned by the family of former President Jiang Zemin.

Guo Wengui, CCP killer and founder of the New Federal State of China, has his latest remarks on the subject in his live broadcast yesterday in response to questions from warrior friends protesting in many cities across the globe.

Guo said to his warrior friends:

In France, Belgium, and other countries, there are about 60 thousand bank accounts controlled by the Chinese Communist Party. 

When did they open these accounts? Insider officials told me that the biggest out-flow of money from China was April, May until July of 1989. I was shocked by this. Could you imagine, friends? That was the time I joined the Tiananmen Square protests, later was arrested and put into prison by police.

In 1989, the CCP leadership thought that their regime was about to end, so they moved huge amounts of wealth overseas and distributed their assets in many different accounts across the globe. Even by now, they have not touched the money, never.

The second time was before the Beijing Olympic Games, from 1999 to 2001. That’s another high time for them to move money overseas. The CCP leadership was worried that if they could not win the right to hold the Olympic Games, its regime would be under threat of collapses because of western sanctions and being kicked out from the WTO. But they succeeded.

The third time was during the economic crisis in 2008 when the CCP leadership moved more assets overseas. At that time, they also printed huge amounts of paper money.

Those insider officials have given me advice as to how to obtain these assets for our New Federal State of China in the future on behalf of the Chinese nation.

We need to go through some legal procedures recognized by international law. Now we have the support of over 200 countries. I have full confidence that we have the support of at least 150 countries.  

Dear warrior friends, today you are protesting in Europe and show the world that we truly represent a new China. In the future, these countries will help us take back that money from the banks in Switzerland. But I am telling you that things won’t be that easy in the case of Switzerland. It takes three steps for the transfer of wealth to be accomplished, with the cooperation of the US government.

Guo Wengui Exposes Jiang Zemin’s Embezzlement

On February 15, Guo Wengui revealed in a video that the former President Jiang Zemin and his family embezzled national assets worth US$500 billion (about 4 trillion yuan), making them the richest family in the world. This money is now being managed by his grandson, Jiang Zhicheng.

The revelation is based on information obtained by Guo’s professional investigation team, which confirmed that the Jiang family holds large amounts of cash and assets at home and abroad. These assets include funds, stocks, bonds, energy and technology shares, investments in gold futures, real estate, overseas holding companies, and offshore companies.

The majority of assets under Jiang Zhicheng’s control are held in Australia. Guo Wengui has gained much information about his bank accounts and family trusts. Their sources of funding are to be revealed in a subsequent video.

Guo also exposed that Jiang Zhicheng has dual citizenship in the United States and China. In order to substantiate this claim, Guo is able to provide Zhicheng’s Chinese passport details. (China does not recognize dual citizenship. According to Chinese law, if someone from China obtains citizenship elsewhere, their Chinese passport must be revoked). He also alleged that Zhicheng’s girlfriend, Xiayu, has possession of nearly US$100 billion worth of assets.

The corruption of Jiang Zemin’s family has long been known. A few years ago, China Affairs disclosed Jiang Zemin’s secret Swiss bank account of $US350 million and the mansion he bought in Bali, Indonesia, in 1990 worth $US10 million, claiming former Foreign Minister Tang Jiaxuan made the arrangements for him.

Hong Kong’s Open magazine disclosed that in December 2002, the Bank for International Settlements discovered that there was a huge outflow from China of US$2 billion that was unclaimed. It was later revealed by Liu Jinbao, former president of the Bank of China (Hong Kong) Limited that the money was transferred by Jiang Zemin on the eve of the CCP’s 16th National Congress, with the intention of preparing himself for the future. This is said to be a small portion of the total assets embezzled by the Jiang family. (Liu Jinbo was sentenced to death in 2005 for corruption.)

According to reports from overseas Chinese media, the officialdom of Shanghai had been under Jiang Zemin’s control for more than two decades. His two sons, Jiang Mianheng and Jiang Miankang, had long-term connections with the political and business elite, and secretly accumulated their wealth. Jiang Mianheng misappropriated public funds and established a vast telecommunications empire while intervening in almost all major projects in Shanghai. Jiang Miankang was more interested in holding power over the Shanghai Municipal Construction and Communications Commission, which is responsible for the city’s land, demolition, relocation, planning, and construction.

The Jiang family’s corruption has been exposed to the world, but they still have not been indicted despite the local anti-corruption campaigns. In recent years, many people have called on President Xi Jinping to arrest Jiang Zemin, the mastermind behind the corruption, and also to take the road of democratization.

Source: the Vision Times

Unmasking the Family Fortunes of Jiang Zemin, Former Chinese Regime Leader

Jiang Zemin’s son was found to be implicated in several major corruption scandals in 2007, revealing some of the secrets behind the money laundering practice of Chinese Communist Party (CCP) leaders through the privatization of state enterprises.

Jiang Zemin was paramount leader of China from 1989-2002, and this gave him the ability to abuse his political power and embezzle government resources.

According to Renmin Newspaper, it was reported that Jiangsu was the place where Jiang Zemin originally started his money laundering operations, washing money stolen from Chinese taxpayers.

In Jiangsu Province, through projects funded by the central government, Jiang was able to abuse his political power and reap personal profits from money laundering.

According to insiders in Beijing, during Zhu Rongji’s time as China’s Premier, he endorsed the plan proposed by Jiang for “the privatization of the state enterprises”, and worked with Jiang to jointly foster their development. Zhu Rongji pledged to drag China’s state enterprises out of poverty in three years. But two years later, Zhu suddenly realized that a number of state enterprises had become so-called “bottomless holes”; no matter how much money was invested in them, they never developed, but instead continued to solicit the state for more funds.

The funding for state enterprises allocated by the central government was turned into various forms of loans for economic stimuli. Through the formation of joint ventures with foreign corporations, government officials were able to pocket personal gains through the process. The privatization of the state enterprises set the stage for Jiang’s transfer of his private assets abroad, which contributed to further money laundering.

As China opened its doors to foreign enterprises, it also opened the doors to further channels of corruption, as foreign companies came to assist Jiang in the process of laundering money.

According to the book Anything for Power: The Real Story of China’s Jiang Zemin, based on sources in Shanghai familiar with Jiang and published by The Epoch Times, after Jiang was appointed Party head in 1993, his son returned to China from America and embarked on a path of corruption with his father. In 1994, Jiang Mianheng used several million yuan to purchase the state enterprise Shanghai Joint Venture, which was worth several hundred million yuan on the Shanghai Stock Exchange at that time. On the surface, it was still a state enterprise, but in actuality, it had become the private property of Jiang Mianheng.

According to the book, state enterprises that Jiang’s son has taken charge of include China Netcom Telecommunications Limited (wang tong), Shanghai Automobile Industry (shanghai qiche gongye jituan gongsi), Shanghai Information Network (shanghai xinxi wangluo), and Shanghai Airport Corporation (shanghai jichang jituan gongsi). These state enterprises, through the process of privatization, have become the private properties of the Jiang family.

Many prominent foreign figures in business and politics sought to forge close ties with Jiang after he rose to power, including a former CEO of a large Wall Street firm. This man formed an investment bank between another large Wall Street firm and a Chinese state-owned bank; this investment bank became the most important channel through which a tremendous amount of wealth was collected and transferred out of China, according to insiders in Beijing.

Source: EpochTimes, June 12, 2019

Special Report: The princeling of private equity

The 28-year-old wears black-framed glasses perched on cheeks still round with youth. A discerning eye might notice the resemblance to his grandfather: former Chinese president and Communist Party leader Jiang Zemin.

Alvin Jiang has a knack for landing lucrative deals in China, the world’s biggest emerging market for private equity. He is a founding partner at Hong Kong-based Boyu Capital, now one of the hottest firms in China. Boyu has attracted high-profile investors such as Asia’s richest man, Li Ka-shing, and Singapore’s sovereign wealth fund, Temasek Holdings Private Limited.

Founded in 2010, Boyu Capital is poised to earn big paydays from two of the most notable initial public offerings to emerge from China in the last 18 months – e-commerce giant Alibaba Group Holding Ltd, and state-backed debt trader China Cinda Asset Management Co. No other China-focused firm with such a short history has found its way into both deals.

Boyu is regarded as among the most professional operators in China private equity, with seasoned executives at its helm. But according to multiple investors, Alibaba and Cinda are not only what lures them to Boyu.

Investors were also impressed with Boyu’s 2011 purchase of a controlling stake in Sunrise Duty Free – which runs all the duty-free stores at Shanghai and Beijing’s international airports. That deal, they believe, provided evidence that Jiang Zemin’s grandson could gain access to a strictly controlled state sector and convert those assets into a highly profitable investment.

The Sunrise investment is expected to earn a substantial exit payout for Jiang, his Boyu colleagues and investors in the firm’s first $1 billion fund, people in the private equity industry say.

Whether the young private equity executive actually uses his personal connections in the way investors attribute to him remains unclear. There is no evidence that Jiang Zemin had a role in helping Boyu win a part in the Sunrise deal or in any other transaction. That hasn’t stopped the belief from spreading that Alvin Jiang is tapping his family connections.

Alvin Jiang and Boyu Capital declined to comment for this story.

PRINCELING INFLUENCE

Alvin Jiang’s Chinese given name is Zhicheng, which means, “with ambition, you can achieve.” He is a “princeling,” the relatives of current or former senior Chinese Communist Party leaders. His father, Jiang Mianheng, is also a princeling. He is the CEO of one of Shanghai’s largest state-owned enterprises and is in charge of China’s push into alternative nuclear energy sources.

The extensive control of China’s Communist Party over almost all aspects of China’s economy and society has often allowed princelings to leverage their political connections to amass wealth. Conflict of interest laws in China are weak and coverage of the business dealings of the political elite is heavily censored in the largely state-controlled media.

Princelings have played central roles in businesses involved in finance, energy, domestic security, telecommunications and the media. Private equity, featuring deals that are often by their nature opaque, has proven to be a natural haven for them.

Within China’s private equity realm, 15 firms identified by Reuters were either founded by a princeling, or have employed princelings in senior roles. Between them, these funds have raised at least $17.5 billion for investment since 1999.

The most powerful investors in private equity funds, known as limited partners, include giant U.S. pension funds and insurance companies; sovereign wealth funds; university endowments; and ultra-high net worth individuals. For some of these big investors, the China game is straightforward: “You just have to know the right people,” said one veteran limited partner. “It’s why you invest with a princeling fund.”

Several limited partners told Reuters that their firms assess princelings on their political connections and ability to convert those ties into business deals.

Alvin Jiang and Boyu Capital, these investors say, rank high on those lists.

AN OUTSTANDING RETURN

In mid-2011, Boyu agreed to pay around $80 million for a 40 percent stake in Sunrise Duty Free, according to three sources with direct knowledge of the deal, valuing Sunrise at $200 million.

The ownership of the remaining 60 per cent of Sunrise has not been made public. Boyu, however, has told investors it has a controlling stake, sources with knowledge of the matter said.

At the time of Boyu’s investment, Sunrise ranked 15th among the top 25 travel retailers in the world, with annual revenue of around $670 million, according to the Moodie Report, which tracks the duty free industry.

By early 2013, Boyu had marked the Sunrise business on its books at a value of around $800 million, two of the sources with direct knowledge of the valuation said. Bankers, however, value Sunrise at twice that amount – at around $1.6 billion – based on 2012 sales figures the company filed with Chinese authorities, which Reuters reviewed.

Based on Boyu’s more conservative valuation of $800 million for Sunrise, Boyu could be sitting on a paper gain of around four times its money in just under three years – an outstanding return in an industry where earning a multiple of two times over five years is considered a success. Boyu has already recovered much of its Sunrise investment through dividend payments, according to three people with knowledge of the matter.

BEHOLD THE SUNRISE

The man who founded, built and then sold Sunrise to Boyu is Fred Kiang, a Chinese-American businessman with close ties to the Jiang family, according to Alvin Jiang’s friends and business associates.

Kiang founded Sunrise in 1999. That was the year the central government under Jiang Zemin opened up the operation of duty free shops to international bidders at the new Pudong International Airport in Shanghai – Jiang’s political power base.

Previously, duty free operations had been a monopoly controlled by state-owned China Duty Free, and foreign firms like Kiang’s were excluded from the business.

Three international companies were selected to operate at Pudong airport, including two established duty free firms: World Duty Free, owned at the time by the British Airport Authority, and Orient King Power, a subsidiary of Hong Kong’s King Power Group. The third tender went to Kiang’s newly formed Sunrise Duty Free, a foreign-owned company with no previous experience in the industry.

Sunrise won a 10-year contract to sell tobacco and alcohol at Shanghai’s Pudong Airport, World Duty Free won a five-year contract to sell perfume and cosmetics, and Orient King Power won the concession to sell luxury goods.

SPECIAL APPROVAL

In 2000, China’s State Council approved a measure that handed control of all duty free businesses – except those in Shanghai – from local governments to state-owned China Duty Free. Foreign companies were banned from setting up joint ventures or directly owning duty free businesses in China.

Yet in 2001 Sunrise Duty Free took over the perfume and cosmetics duty free concession at Pudong airport when World Duty Free pulled out of its contract. Published reports at the time quoted World Duty Free as calling it a “strategic withdrawal” because passenger traffic had not reached forecast levels. Sunrise in time would also take over luxury goods at the airport.

In 2005, Sunrise won a 10-year concession at Beijing International Airport, outbidding China Duty Free and Orient King Power. In 2009, its contract at Pudong was renewed for another decade.

Sunrise was granted “special approval” to operate duty free shops by China’s cabinet, the State Council, despite restrictions against foreign ownership, according to a 2009 report by China Business News, a state-owned media outlet. No other details were given on the Sunrise exemption.

Today, business at Sunrise is booming. According to the company documents seen by Reuters, Sunrise had revenue of $1.08 billion in 2012. The Moodie Report ranks Sunrise just behind state-owned China Duty Free, which controls nearly all of China’s other duty free shops.

KIANG AND THE JIANGS

Why Fred Kiang would sell 40 per cent of a thriving company at what appears to be a discount remains the central puzzle surrounding the Sunrise deal. Apart from Sunrise, Kiang’s mainland business remains unknown. Friends and associates note his taste in expensive cigars, and the little publicity he has received is largely devoted to that passion. In 2009, he hosted an event in Shanghai to smoke the 40th anniversary Cohiba Behike, a limited edition Cuban cigar that sold for $500 apiece.

Kiang, who is in his late 60s, shuttles between Shanghai, Hong Kong and Tucson, Arizona, where he owns properties in areas ranging from gated communities to low-end rentals. Alvin Jiang and Jiang Mianheng have used a Kiang residence address in Arizona for small personal business transactions.

Kiang declined to respond to e-mails and phone calls from Reuters.

Born in China, Kiang claims Shanghai roots, but was raised in the United States. He received his undergraduate and MBA degrees at Massachusetts’ Babson College in 1970 and 1975, respectively, and now sits on the college’s board of trustees.

Kiang first met Jiang Zemin in 1986, when Kiang served as vice-chairman of the San Francisco-Shanghai Sister City Committee, led by then city mayor and now U.S. Senator Dianne Feinstein, according to a person close to Kiang. Kiang and Jiang noted their common surname, which though spelled differently in English, is the same character in Chinese, said the source who is Alvin’s friend and business acquaintance.

In 1989, Jiang Zemin became Communist Party General Secretary; in 1990 Kiang established his base in Shanghai. Kiang was a senior executive at Newbridge, the former name of TPG Capital in Asia, one of the world’s biggest private equity firms, three people with direct knowledge told Reuters.

From the late 1990s to the 2000s, Kiang was an advisor to U.S.-based insurer MetLife Inc as it looked for a joint venture partner to build its business in China, said a source with knowledge of the matter. Kiang negotiated on MetLife’s first mainland license in 2004, the source said, one of the first major Sino-foreign ventures created after China’s 2001 entry into the World Trade Organization.

TPG and MetLife declined to comment.

BOYU’S RISE

In 2010, Alvin Jiang, newly graduated from Harvard with a bachelor’s degree, was just another newbie banker in Hong Kong, working as an analyst at Goldman Sachs private equity unit. Nine months later, he left to launch Boyu. On September 21, 2010, he filed incorporation documents in Hong Kong, listing himself as the company’s sole director.

When Boyu first made news in 2011, it was private equity veteran Mary Ma whose name captured headlines, not Alvin’s.

Ma, the former CFO at Lenovo Group, left a senior role at TPG to help set up Boyu. Additional co-founders soon followed: Louis Cheung, former executive director of Ping An Insurance Group of China, credited with its turnaround from 2000; and Sean Tong, a veteran of U.S. private equity firms Providence Equity Partners and General Atlantic, where he was Alvin Jiang’s boss during a summer internship in 2008.

Ma and Cheung were known in the private equity industry for turning around struggling companies; Tong was a noted dealmaker. Combined, they had 50 years of industry experience.

DILIGENT AND FOCUSED

Two subsequent investments cemented Boyu’s reputation for having the influence to find its way into profitable, high-profile assets. Alvin Jiang played a role negotiating both deals.

In 2012, Alibaba founder Jack Ma found himself face-to-face with Jiang Zemin’s grandson. Boyu had joined a consortium led by China Investment Corp (CIC) to raise some of the $7.1 billion that Ma needed to buy back half of Yahoo! Inc’s 40 percent stake in Alibaba. Some high profile departures had left CIC, China’s giant sovereign wealth fund, short of personnel. That left it up to Boyu to lead the negotiations, with Alvin on Sean Tong’s team, according to two sources directly involved in the negotiations.

Alibaba and CIC declined to comment.

The CIC consortium received a 5.6 percent stake in Alibaba in exchange for raising capital to help buy half of Yahoo!’s shares in China’s giant e-commerce company. Alibaba was valued at around $38 billion then.

Analysts estimate Alibaba is worth at least $140 billion today, which means Boyu’s investment as part of the CIC consortium has increased more than three and a half times in value in 18 months. The e-commerce giant has announced it will list shares on one of the New York exchanges in the third quarter of this year, a deal expected to exceed Facebook’s $16 billion offering in 2012.

Alvin Jiang also brought in Boyu to invest around $50 million in Cinda, created in 1999 to buy bad debts from state-owned banks, said two sources familiar with the deal. Banks and private equity firms were jockeying to get a piece of the $1.6 billion stake that Cinda was offering to strategic investors ahead of its initial public offering.

The consortium of investors that were allowed to make a pre-IPO investment in Cinda included China’s social security fund NSSF, UBS AG, CITIC Capital, Standard Chartered Bank – and two private equity funds, the powerhouse Carlyle Group and Boyu Capital.

Some of Jiang’s friends stress he is more than just a well-connected face. He works through a company’s numbers when negotiating, a skill he picked up during his brief time at Goldman, said one friend and business acquaintance. “Many people from his background would not bother to do that,” the friend said.

“HEADLINE RISK”

Princeling privilege isn’t necessarily permanent in China, even for the grandson of a living former President. The extraordinary fall of former Chongqing governor Bo Xilai in 2012 reinforced that notion for many private equity investors.

Because they work for companies governed by Western laws, some have turned cautious about investing in princeling firms. In private, investors discuss “headline risk,” the fear that a business deal will end up on the front pages of newspapers.

Those worries have risen with President Xi Jinping’s anti-corruption campaign, and the U.S. Securities and Exchange Commission’s investigation into Wall Street’s hiring practices in China.

“Our firm is pretty equally divided on investing with princelings,” said one European investor. “I oppose it, but many of my colleagues are for it. I see princeling funds as a double-edged sword.”

For Boyu, profit and prospects have so far trumped any such anxiety: Alvin Jiang’s firm has swiftly raised $1.5 billion from investors for its second fund, 50 per cent more than its first fund, people with knowledge of the matter said.

Reporting by Stephen Aldred and Irene Jay Liu
The Reuters

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