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Two tycoons emerge from jail and spark debate

Gu: out of jail and defiant

“No man is above the law and no man is below it: nor do we ask any man’s permission when we ask him to obey it.” So said Theodore Roosevelt, the 26th President of the United States.

That seemed to be the intended message coming from China this week after the announcement that top politician Bo Xilai has been expelled from the Party. “No one, no matter what rank, will be immune from Communist Party discipline,” the official state news agency Xinhua intoned gravely, in its report on the expulsion.

Bo, the former Party boss of Chongqing, was also told he would face criminal charges for abuse of power and corruption. His wife has already been given a suspended death sentence for her role in a murder.

In announcing Bo’s expulsion, Xinhua added that the Party must recognise the “perennial, complex and arduous nature of the anti-corruption fight”. This seemed to be a reference to Bo’s alleged links to businessman Xu Ming, the tycoon who owns Dalian Shide (see WiC145 for his background). Chinese media has claimed the pair had a corrupt relationship. Xu has been detained since March and if the current pattern holds, an announcement on his future may emerge next.

Of course, Xu is not the first Chinese businessperson to face detention. But it’s less common to hear much about former business bosses who have served their sentences, and now plan to return to everyday life. In fact, two high-profile prisoners have emerged from the cells in recent weeks, with both causing quite a media stir, especially on rumours they are planning business comebacks.

The first is Gu Chujun, who founded Greencool Corporation in 1992, aged just 33. After listing the firm in 2001, he purchased Kelon, one of China’s leading electrical appliances makers. The expansion spree continued when Gu acquired MeiLing, another appliance maker, as well as three carmakers. He spent at least Rmb1.3 billion on his acquisitions, reports 21CN Business Herald, and was viewed at the time as something of a corporate wunderkind.

But his empire soon unravelled and in 2005 he was jailed for embezzlement and publishing false financial statements.

Guan Guoliang was detained two years later. He had founded New China Life Insurance (NCI) in 1996, building it into China’s third largest insurer. A year younger than Gu, Guan was also charged with misappropriating assets.

Coincidentally both men emerged from prison within days of one other. Gu’s release was the more dramatic of the two, in part because he called a press conference. At the event last month he gave reporters a 27-page document alleging that he was brought down by corrupt officials conniving with a rival company. The firm in question quickly denied the claim and is said to be considering legal action, although Gu seems up for the fight, bringing a hat with a ‘Not Guilty’ slogan to his press event. Journalists left the briefing speculating that Gu gave strong indications he plans to relaunch his business career.

The same sentiment applies to Guan, who predicted a return to business before his jailing. The media is now wondering whether he too will have any politically embarrassing revelations to air.

In typical Chinese fashion, historical idiom was called upon to discuss the prospects of the two men. In the case of Gu, the Shanghai Securities News, quoted the example of Lian Po, a general from the Warring States period. It was said of Lian: he is old, can he still eat? The reference is to a great man being past his prime.

Of course, while speculation continues over what the two businessmen might do next, greater attention will focus on the fate of Dalian’s Xu Ming. For a public unused to the type of disclosures that have plagued elite politics since the unseating of Bo Xilai – not least the poisoning of a Briton by a princeling – Xu’s detention is much more familiar ground, highlighting once again the often sordid relationship between business and politics in modern China.


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