China is often described in a superlative light but there is at least one statistic that has yet to feature on many lists: as global leader in the ranking of the largest divorce settlements.
In fact, this summer it seized the top spot, with a divorce payout worth more than $3 billion. Adding spice to the story is that the payout was made by a woman to her former husband.
Wu Yajun, regarded in the Chinese media as the world’s richest self-made woman, parted ways with Cai Kui, her husband of two decades in August. He left the union with a 29% stake in Wu’s company, Longfor Properties, according to data from the Hong Kong Stock Exchange.
Last month Longfor confirmed media reports that the couple had divorced in a “peaceful and friendly manner” in an announcement that helped reverse a sell-off from investors worried that a messy divorce would harm the company’s performance.
The divorce is the latest of several break-ups among China’s super wealthy, many of which have had a disastrous impact on the businesses that made them rich.
By contrast, Wu’s separation seems to have been pretty clean by those standards, though Longfor’s decision not to make a statement on the divorce led to the brief run on the stock after the story leaked in the media.
Longfor still refuses to give details about the settlement, saying only that Wu and Cai have held their shares in two separate trusts since before the company listed in 2008.
“As major shareholders, the two have reached an agreement on protecting the company’s interests in future, other details are private matters, the company is not able to comment,” Longfor told WiC.
“As a far as we know, shares that were once in Ms Wu’s name are now in Mr Cai’s,” says Rupert Hoogewerf the founder of Hurun report.
“The amazing thing here is not just that is the largest divorce settlement in the world but also that it is from a woman to a man. Once again this shows Chinese business women are ahead of their male peers, ” Hoogewerf continued.
Until a decade ago divorce was still relatively uncommon in China, especially between people who had a lot to lose financially from the process. But new laws designed to protect the weaker party, as well as a more relaxed social attitude to marriage break-ups, has led to more people seeking to end their unions.
Sometimes there are commercial consequences. Last year the online video website Tudou had to delay its listing in the United States because the ex-wife of its chief executive Gary Wang was demanding a 38% share in the company. Eventually Wang paid his ‘ex’ – Yang Lei, a Shanghai TV news anchor – $7 million in compensation and the listing went ahead, six months late.
But by the time of the settlement, market sentiment had soured and Tudou’s IPO only raised half the amount originally forecast.
Similarly, the planned IPO of fast food giant Kungfu also had to be put on hold after ex-wife of founder Cai Dabiao’s sued for 25% of the company. Cai eventually paid her $75 million in compensation but the squabble bred bad blood with his business partner (his ex-wife’s younger brother, unfortunately) and last year Cai was arrested on suspicion of fraud (on the evidence of information provided by his former spouse’s family).
While the Kungfu case was a scandalous one, the money involved still wasn’t enough to see China climb the rankings into the top 10 most expensive divorces worldwide.
The final ascent came this year when Yuan Jinhua, one of the founders of the heavy machinery manufacturer Sany, paid his wife $359 million, making her one of China’s richest women in her own right.
But for China to really dominate the divorce list – think of it as an indicator of economic might, not just marital disharmony – Song Yahong, the disgruntled ex-wife of steel magnate Du Shuanghua will need to win her own $4 billion claim against her former husband.
The case is pending.
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