Economy

Long-term guests

How a Hong Kong hotel became a refuge for mainland bosses

ICC and IFC Two, two highest commercial towers in Hong Kong, are seen at both sides of Victoria Harbour

Look north: the ideal outpost for tycoons fleeing investigation

In 1999, Lai Changxing, the man charged with masterminding the largest corruption scandal in modern Chinese history, sought refuge in Vancouver. Lai, whom former Premier Zhu Rongji said “should die three times, and even so that wouldn’t be enough,” chose Canada because it resisted the deportation of asylum applicants in cases in which it thought they might be executed after returning home.

Lai ended up staying in Vancouver – albeit in a prison cell – for more than a decade, causing enormous strain in Sino-Canadian relations. But in 2011 the Canadian government finally relented, sending him back after Beijing promised that he would not face the death penalty.

Over the past year, other fleeing Chinese business figures have chosen somewhere closer to home in their efforts to avoid investigation back in China. Tencent Finance, a news portal, reports that many Chinese tycoons have hidden out inHong Kong, with a particular preference for staying at the Four Seasons Hotel. Many have booked into the five-star property after swift departures from their hometowns (usually on hearing that an official with whom they were connected has been placed under investigation in a government graft probe).

Take Xu Zhendong. The head of technology firm Beida Jade Bird has been at the hotel since September, since it emerged the company’s former senior executive Su Daren had been arrested. State-owned China Business Journal reported that Xu fled to Hong Kong out of fear that he may be implicated by the probe into Su, although the company has denied that Su worked for it.

But just because he is in hiding doesn’t mean that Xu has given up on his luxury lifestyle. He and his entourage booked out an entire floor to protect their privacy too, Tencent Finance reports, citing another guest who has been staying at at the hotel for six months.

Xing Zhibin, the founder of Shanxi coalmining firm Liansheng Energy, also turned up at Hong Kong’s Four Seasons early this year, after he heard that the authorities in Beijing were investigating his company. Xing didn’t stay in Hong Kong for long. After hearing that the coast was clear for him to return, he went back to Shanxi. That may have been premature: not long afterwards he was arrested for colluding with local officials.

Tencent Finance says guests at the hotel often arrive in herds from a particular province where a corruption clampdown has suddenly escalated. For a while, business bosses from Shandong were the main guests in Hong Kong after they caught wind that Beijing was zeroing in on their province. Likewise, when it emerged that former Jiangxi Party secretary Su Rong was being targeted by graftbusters, businessmen from that province suddenly started checking-in.

But of all the five-star hotels in Hong Kong, why this one? In addition to its first-class facilities, the Four Seasons is believed to have very good feng shui, says Tencent Finance. Helpfully, it’s also located above the train station to the airport, making it convenient for the tycoons to send executives back and forth to China with instructions.

The fact that it is only about a five-minute walk from the ferry terminal to Macau is another plus. Bored tycoons can make impromptu trips to the casino while they wait for news on whether it is safe to return to China yet.

“Only when I’m gambling will I forget about my troubles,” one such boss told Tencent Finance.

In many cases the individuals may not be subjects of anti-corruption investigations themselves. But they might be wanted to give evidence and have decided that this risks embroiling them too, so it is safer to pack a case and go.

One of the businessmen says that the trip isn’t too unpleasant. Dining together at one of the hotel’s Michelin-starred restaurants or sunbathing at the pool, the members of this mainland coterie trade updates on the cases that relate to them or gossip about whose head might be next for the chopping block.

As a result, the hotel has been nicknamed “the north-facing watchtower,” as these guests monitor developments north of the border to work out when they might return.

One tycoon says when they see each other in the hotel lobby, they also greet each other by asking, “How is your case?” instead of the more habitual enquiry, “Have you eaten yet?”

Hong Kong’s proximity to China also means it is easier for these individuals to keep a handle on their business interests. Wu Changjiang, founder of NVC Lighting fled to Hong Kong in 2012 after he became ‘a person of interest’ in a corruption case against a Party official in Chongqing. For months, Wu made his business decisions out of his hotel room (he even accepted media interviews there) before returning to the mainland when the case blew over (we’ve mentioned him before, see issues 159 and 249).

Legal experts say Hong Kong is also an attractive destination because of the city’s elaborate extradition procedures – hence why former American NSA contractor Edward Snowden famously fled there first after blowing the whistle on US cyber-snooping.

Small wonder, then, that Chinese businessmen have flocked there too. Last week WiC reported that LeTV’s boss Jia Yueting had spent almost five months overseas (mostly) in Hong Kong as rumours swirled in the media that he was trying to dodge a corruption investigation. Several Guangzhou-based property developers have also refused to go home since Wan Qingliang, the Guangzhou Party boss, was held for alleged corruption in June (they will be aware that Chen Zhuolin, chairman of Guangzhou-based developer Agile, is under some sort of house arrest too on suspicion of bribery, see WiC256).

Hiding in Hong Kong doesn’t mean that the tycoons are completely out of reach, says Hao Junbo, a lawyer. As a Chinese territory, Hong Kong has not signed an extradition treaty with the mainland. But a system is in place for authorities to help one another in law enforcement. An article in the Hong Kong Basic Law states, “The Hong Kong Special Administrative Region may, through consultations and in accordance with law, maintain juridical relations with the judicial organs of other parts of the country, and they may render assistance to each other.” Clearly, some of the longer-term stayers in the city don’t think that these provisions will be enforced.

And as to the tycoons’ choice of hotel, Four Seasons had little to say. When Tencent Finance contacted its management it declined to comment on its guests. The article about the hotel has now been removed from Tencent’s website, but it continues to be a prominent talking point in the media, not least because the story was translated and republished by the state-owned Global Times this week.


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