Property

Gunning for growth

How a business mogul raised his initial investment – with a bank job

Henan w

Shi Erqun’s home in Henan

A story in the Bible tells of a rich man with three servants. Before going away on a long trip, he entrusts each of them with some money. Two use the cash to trade and work, and are able to return their master’s loan twice over when he returns. The third servant simply buries his money. “You fool!” scolds the master, “Why didn’t you at least place the money in a bank so I could have received the interest?”

Quite what the master would have made of Shi Erqun, a tycoon who made a fortune in property from his initial investment, is best left to the imagination, especially as Shi raised his founding capital by robbing a bank.

In May 1999, five robbers stormed a bank in Henan province, brandishing revolvers. They shot the security guard four times in the head, the Global Times reports, before smashing the bank’s bulletproof glass with hammers and making off with the cash.

In total, the thieves absconded with Rmb2.08 million ($327,000 at today’s exchange rates). The heist became known as the “12.5” incident, and Premier Zhu Rongji personally called for an investigation to be carried out. But it was only earlier this month – some 16 years later – that the gang’s leader Shi Erqun was arrested.

Shi Erqun now has a business portfolio that includes property development, a hotel management firm and a trading company. His empire is worth several billion yuan, the Wall Street Journal reports. But he was also the mastermind behind the infamous robbery, taking the lion’s share of the loot.

Shi initially kept a low profile after the robbery. But in 2004, two of his accomplices were caught trying to rob another bank. For some reason, this seemed to spur him to ‘go legit’ and pursue a career in property development.

By 2006, he had accumulated Rmb6 million and used the money to start a development company in Zhumadian in Henan. According to Want China Times, the plan was to give himself four years to earn enough money to leave the country, but his commercial success led him to reconsider. By 2009 he was ranked as the number one entrepreneur by his local district (an award it might now be reconsidering) and he was purportedly earning Rmb20-30 million a year.

He later said: “If I hadn’t been arrested, my plan was to make Rmb1.5 billion by the time I was 58.”

Following the arrest, reports on the saga have been fairly sympathetic, with a weibo post by China Youth Daily mentioning that Shi “threw himself into benevolent work, supporting impoverished students, investing Rmb5 million in repairing a village road, and giving financial support to areas of natural disasters”.

Reporters have interviewed people who know him. “Everyone thinks he is a great and respectful man, even though he did such a terrible thing as robbing a bank”, one villager said. But Shi’s business rivals were less generous, choosing to add to the scandal: “In the Zhumadian commercial world, everyone knows that Shi has four wives and 12 children,” scoffs Li Mou, another real estate boss. (Shi denies the claims, saying he only has three children, and one wife.)

But other commentators said they weren’t surprised that a rich man had a dishonest past, asking: “How many unsullied things do China’s rich and powerful own?”.

The common view is that many tycoons have prospered as robber barons in a country where legal protection is flimsy and corruption rife.

What happens next to Shi is unclear. Initial reports suggest that he didn’t assault anyone during the robbery, which might spare him a harsher sentence (although he admits firing a warning shot after a woman attempted to phone the police).

In the meantime, the story continues, with local press now probing why it took so long to catch him, and why only now…


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