World View
Global Dispatches From ABC News Reporters
ABC News staff around the world report on what makes the news and what doesn't.
RECENT POSTS
MONTHLY ARCHIVES
« Previous | Main | Next »
China's Richest Man Goes Missing
November 25, 2008 11:47 AM
By Stephanie Sy, Correspondent, ABC News Beijing
It isn’t clear when China’s richest man was last seen, but he was reportedly detained Nov. 19, nearly a week ago. Huang Guangyu, the founder and head of Gome Electrical appliances, is one of the most well-known businessmen in China, but even the state-run media are having a hard time confirming his whereabouts.
If more transparency and accountability is the government’s goal in investigating the business practices of men like Huang, it certainly doesn’t seem to be the policy of the powerful Ministry of Public Security. Days after it was first reported by the respected investigative magazine Caijing that Huang had been detained for questioning for “share price manipulation,” ministry officials are refusing to confirm whether this is true.
This has led to sensational headlines such as, “Chinese Billionaire Vanishes” (Sydney Morning Herald). For those of us who regularly cover China, the “disappearance” of someone being questioned by police is quite common, but usually occurs in the context of someone being investigated for something like “subverting state power” i.e. political dissidents.
According to Caijing, Huang, whose name is also spelled Wong Kwong-yu, is under investigation for reported links to his big brother’s company, which has seen a peculiar pattern in share price in the last year. Other media reports speculate that he is accused of corruption. All of it reeks of something resoundingly familiar to journalist-turned-businessman Jim McGregor, author of “One Billion Customers.”
“This is a very dangerous place to be rich,” McGregor said. “When they first came up with the ‘rich list’ here, they started calling it the ‘death list’ because about five years ago the top people on the list all ended up in jail.”
It is taken as a cynical but probably accurate assumption that the most successful private entrepreneurs in China must have the right relationships, or “guanxi,” to make it in the Wild West of China’s rough and tumble economy.
“This guy is in the consumer-goods business, a brand-new business in China,” McGregor said. “You can imagine all the opportunities there are for kickbacks and corruption in all those suppliers to all those stores, and something he may have had nothing to do with, but it’s just part of the business landscape.”
But it is a landscape that is changing rapidly, and businessmen who are used to business as usual are experiencing rude shocks. On Friday, the China Securities Regulatory Commission announced it is cracking down on “malpractice” in stock trading. At the same time, the commission announced big fines for individuals and companies accused of price manipulation and violating information disclosure regulations. Whether Huang was caught up in this dragnet is unclear, but his apparent arrest shows that authorities may be catching the big fish to warn the small ones.
“They’ve got some real difficult parts of their economy that the arrest of the richest man in China illustrates,” McGregor said. “This is a rough economy that needs regulation, rule of law, and hopefully this will help move them toward that.”
Read more blogs from Stephanie Sy
Read more blogs from the ABC News Staff
November 25, 2008 in Stephanie Sy | Permalink | User Comments (10)
You can follow this conversation by subscribing to the comment feed for this post.
Jim McGregor is a dumba$$.
Posted by: chris | Nov 25, 2008 12:53:07 PM
Same thing goes on in Russia. You simply cant be rich and have no ties to the ex-communist regime leaders, who are feeding off of your wealth. But guess what, once you step a bit over, they'll eat you alive.
Posted by: baby store | Nov 25, 2008 1:35:32 PM
chris is a dumba$$.
Posted by: Jim McGregor | Nov 25, 2008 1:38:42 PM
What kind of story is this?
The gal didn't even spend time to parse enough the local media reports.
Proof of real intent to mislead the readers?
Posted by: Joe | Nov 25, 2008 1:46:09 PM
I didn't think it was a poorly written article as Joe seems to believe. Details are sparse, but she did her best to touch different aspects surrounding the businessman's 'disappearance'. If anything, I appreciate her insight from regularly covering news from China.
Read the article in its context before berating a journalist's efforts.
Posted by: Jliu | Nov 25, 2008 2:58:54 PM
wow Joe, is it even possible you are an american? Time to learn english when criticizing an article. Proof of a chinese national placing doubt in readers minds about communism strongarming?
Posted by: gradwrkout | Nov 25, 2008 3:01:33 PM
I'm glad they go by the philosophy of going for the "Big Fish" first. If we would do this with the "Big Fish" drug suppliers in America our jails would certainly not be filled with little fish taking up necessary space for bigger criminals. I guess our "Big Fish" know who they have to take care off first.
Posted by: Ruben | Nov 25, 2008 3:14:57 PM
William Hung is China's richest man??
Posted by: Aaron | Nov 25, 2008 3:21:09 PM
@Aaron lol
Posted by: en | Nov 25, 2008 3:42:18 PM
Dumb article. All Chinese are as pure as the snow on a convent roof.
Posted by: George Clinton | Nov 25, 2008 4:40:52 PM
Post a comment
