Economy

Casting the net

Graftbusters broaden search to the sports and cultural sectors

Fe

Xiao Tian in better times

Huang Jianhua first made headlines in the sports pages a few years ago. Going by the name Kenny in America and Britain, the entrepreneur was linked with a takeover of Liverpool football club. He was also believed to have acquired a 15% stake in NBA basketball team the Cleveland Cavaliers. But a bid for Liverpool never materialised, and ESPN journalist Marc Stein reported that an agreement that would have allowed a group of Chinese investors to partly-own the Cavaliers wasn’t executed either.

Instead, the distinction of becoming the first Chinese to own an NBA-affiliated team, Stein wrote, went to Sonny Xiao, who bought a stake in the Dallas Legends (which is the second team of the Dallas Mavericks).

Huang and Xiao have had similar career paths. Both were born in China and educated in the US. Both have worked in the financial sector, while maintaining interests in the Chinese sports industry (in areas such as ticket distribution and promotional businesses).

But while Huang has spent much of his life cultivating connections with Jewish businesspeople in America (particularly in sport, see WiC29), Xiao’s network is more homegrown: he is the son of Xiao Tian, deputy head of the General Administration of Sport of China.

Xiao junior was back in the spotlight this month after his father was put under investigation for corruption.

According to Oriental Daily News, Xiao senior was a respected and powerful figure in the state’s sports industry. A former fencer, he became a bureaucrat, eventually leading the Chinese national team to its first ever Winter Olympics gold medal which was won at the 2002 games held in Salt Lake City. Last September he became a vice-president too of basketball’s world governing body.

“The first tiger in the sports industry is netted,” the newspaper said. “Expect more scandals from the sector to come.”

Another major figure was also invited for questioning recently – this time in the cultural sector.

Until last week Gu Xin was better known as China’s answer to Luciano Pavarotti. After a successful personal career Gu was put in charge of the China Oriental Performing Arts Group (COPAG) in 2010, ushering in reforms that turned the dancing group into a profitable business.

However, the 59 year-old is now the subject of a graft investigation, the Party’s Central Commission for Discipline Inspection (CCDI) said on Saturday.

“It is alleged that Gu had engaged in a substantial amount of financial fraud to gain control of COPAG, and his reform measures might be used as cover for power abuse and personal profit seeking,” Xinhua reported.

The Beijing News noted that both the sports and cultural sectors receive enormous funding from the state every year. “The CCDI has jabbed the first dagger on the cultural sector. Everyone is now speculating on who would be the more high profile catches,” it reported.

Graftbusters are also breaking new ground with a purge of the judiciary. Xi Xiaoming, the vice president of the Supreme People’s Court, has also been arrested by the CCDI for “serious discipline violations”.

Other parts of the Chinese media has reported that the son-in-law of former central bank governor Dai Xianglong is being detained for questioning as part of a probe into economic and financial matters. This follows claims in the New York Times in 2012 that the CCDI was looking into the business interests of Dai’s family, which appeared to have made a fortune by investing in financial firms over which Dai had regulatory authority.

Oriental Daily News also suggested that the alleged investigation into Dai could be a curtain-raiser for further probes into the banking and insurance sector. “This is what you call the new normal,” the newspaper said.


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