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THREAD! How we (mostly @jotted) documented that the daughter of the man who pushed Hong Kong's national security law through China's NPC ascended the ranks of Hong Kong's pro-Beijing elite, amassing great wealth. This thread will cover A LOT of territory. (1/x)
First of all, read our story, which just posted. Here it is: (2/x): https://www.nytimes.com/2020/08/12/business/china-hong-kong-elite.html?referringSource=articleShare
In mid-2017, HK media reported about the mysterious rapid rise of Chua Hwa Por (Cai Huabo), how he amassed a fortune, and wrote that he was said to be married to the daughter of Li Zhanshu, an ally of Xi Jinping's poised to enter the elite Politburo Standing Committee. (3/x)
Next Magazine, published by Jimmy Lai, who was arrested this week under the new National Security Law (Li Zhanshu is the chairman of the NPC, China's rubber-stamp legislature that imposed the law on Hong Kong) published a piece. So did @yammeiching at the SCMP. (4/x)
Here is the Next Magazine article. @JimmyLaiApple is out on bail, his media company is still publishing, and this article is still available. Unfortunately SCMP pulled Shirley Yam's article.(5/x) https://hk.nextmgz.com/article/2_529498_0
In a statement, @SCMPNews said her article, labeled a commentary, had "multiple unverifiable insinuations" and pulled it. She was soon out of a job. It came just months before the CCP's 19th Party Congress in Beijing. It was, um, sensitive. (6/x) https://www.scmp.com/business/article/2103348/clarification-regarding-column-hows-singaporean-investor-peninsulas-holding
It was written in a breezy way and didn't have documentation. The headline was in the interrogative - "How’s the Singaporean investor in the Peninsula’s holding company linked to Xi Jinping’s right-hand man?” - but it SEEMED accurate. So we set out see if we could nail it. (7/x)
The NYT method is try to get documentation carved in stone. Obvious you say? No, I mean ACTUAL stone. Tombstones that document the family tree. @DavidBarboza2 started this for his 2012 Pulitzer Prize-winning investigation into Premier Wen Jiabao's family wealth. (8/x)
So @suilee set off for the Li family ancestral home in the mountains of western Hebei province, to the village of Nangoucun. Distant relatives weren't helpful (they are often chatty, but Li is VERY senior), but sure enough, there was the tombstone. (9/x)
It's a good tombstone. It shows all of Li's siblings (he is 栗战书, fifth from right on top row). The stone lists all of their spouses too. It is great because Chinese tombstones often omit daughters since traditionally they cease to be in the family when they get married. (10/x)
So yay for the Li family progressive tombstone. But alas, Li Qianxin's generation is not yet memorialized, so we don't have this carved in stone. She is 栗潜心。Back to the drawing board. (11/x)
An aside on Chinese tombs. Sometimes, as with US gravestones, the names of the living children are there. Such is the case with Zhou Yongkang's family tombstone. He was China's former top security chief now in prison for corruption. (12/x)
Closer up, the Zhou family conveniently puts deceased people in black, the living in red. Zhou Yongkang is 周元根 here, his birth name. We know from this that his first wife died. We have the names of his two sons. Transformative.
It helped tie the bow on this story, my first investigation for the NYT, back in 2014. (14/x) https://www.nytimes.com/2014/04/20/world/asia/severing-a-familys-ties-chinas-president-signals-a-change.html
The next year, when we wanted to show that well-connected Hong Kong woman had made a fortune thanks to Alibaba (Jack Ma again), we wanted to show she married the son of one of China's most famous generals. Her name is the one that stands out, since it was carved recently. (15/x)
That tombstone helped with this story that ran ahead of Alibaba's US IPO. It didn't make much of a ripple at the time. (16/x) https://dealbook.nytimes.com/2014/09/14/alibabas-link-to-elite-military-family-is-etched-in-stone/
Anyway, you get the idea. So back to Li Zhanshu and his supposed daughter, Li Qianxin. With the tombstone not giving us what we needed, how could we bring this story home? We were stumped. And, in the words of Dick Cheney, had "other priorities," Until...... (17/x)
Enter Deutsche Bank. In late 2019 the team at @SZ, Süddeutsche Zeitung, who we knew well from working alongside them on the @ICIJorg projects like the #PanamaPapers , reached out. They had a trove of documents from the bank. We <heart> troves of documents. (18/x)
These were internal investigations done by outside law firms, responding to an SEC inquiry. Emails, spreadsheets galore. The docs show that a woman named Li Qianxin, aka Naomi, identified as the daughter of Li Zhanshu, was pushing the bank to hire her little sister. (19/x)
The entry had her name in romanized form and also in traditional Chinese. The surname li (李）is super common, and means plum (Mr. Plum did it in the bank with an offshore account) but the Li used by Li Zhanshu's family is VERY VERY rare (栗）。。Chestnut.
21/x - So we had our tombstone, so to speak. We put a pin in it, and worked with @SZ reporters @christophgiesen @SchreiberDohms to get out the story on the docs. https://www.nytimes.com/2019/10/14/business/deutsche-bank-china.html
22/x - now we were confident we had the story. Getting from 99.9 percent sure to 100 percent sure involved @jotted talking to sources, filling out the details on Ms. Li's Hong Kong life. She details it here in this thread. https://twitter.com/jotted/status/1293506061631012864
23/x - and then there was this. When we reached out on Oct. 10, 2019 EDT via Facebook to ask if Li QIanxin wanted to comment, within hours the Hong Kong company that owned the BVI company that owned their villa on Stanley Beach was dissolved.
24/x - OK Folks. Now the thread is going to get crazy. So I'm on book leave. I'm writing a book about McKinsey (much more on that later). I need to get back to that ASAP so I need to get this off my chest NOW. Are you ready? This is gonna get nuts. And this is NOT in the article
25/x - So you may ask yourself, WHY was Naomi Li Qianxin making recommendations to Deutsche Bank on who to hire? What was her position? Well, a few days after the Deutsche Bank article ran, she was promoted to chairwoman of China Construction Bank International (建银国际）
26/x - She was only 37 at the time. And she was chairwoman of an investment banking arm of one of the world's biggest banks, which was state-owned. And she was the daughter of the third ranking member of the Chinese Communist Party. Here it is on China's own company registry.
27/x - She started working at CCBI in 2011, since she was 29, per Hong Kong SFC records. The year before, a CCBI unit in Tianjin when into business with another entity. Here it is, in Chinese.
CCBI's partner was a Beijing company, Qinchuan Dadi (秦川大地投资有限公司）, formed a few weeks after the Communist Party Congress in 2007 that elevated Xi Jinping to the Politburo Standing Committee and marked him as the future party boss. (28/x)
The resulting company, CCBI Yuanwei (建银远为投资基金管理（北京）有限公司） in turn invested in other CCBI entities。You have to read Chinese, but here are its downstream investments. (29/x)
Buckle up! So the owners of Qinchuan Dadi were a couple, who controlled it through a jumble of companies called Yuanwei that were based in Shenzhen, the power base for Xi Jinping's late father, Xi Zhongxun. (30/x)
Of course all these Xi Jinping references are apropos of something, for the couple were none other than Qi Qiaoqiao, the older sister of Xi Jinping, and her husband Deng Jiagui. (31/x)
So when Li Qianxin came on board in 2011, the bank was already in business with the family of Xi Jinping. CCB is a huge bank but CCBI is kind of boutique. Not a "bulge bracket" investment bank like Goldman. But it gets way more interesting. (32/x)
In Jan. 2013 Qi and her husband ended their business ties to CCBI Yuanwei. Another Beijing company called Kanghai came in and bought them out. The was weeks after Xi took over as Party Chairman and days after he launched his big anticorruption campaign. (33/x)
One of the founders of Kanghai was a guy named Yang Hongwei (杨弘炜). He also happened to be, starting in 2007, the head of CCBI. Kind of a related-party transaction. But hey, it's "Confucian Culture," right? He had two other co-founders. (34/x)
Another founder was a guy who went on, interestingly enough, to be an economist for the US Federal Reserve. But it is the THIRD co-founder who is REALLY interesting. His name is Xiao Jianhua. (35/x)
So @DavidBarboza2 and I wrote about Xiao in June 2014 on the occasion of the 25th anniversary of the Tiananmen Massacre. We wrote about how a company he founded bought up the CCBI Yuanwei stake. https://www.nytimes.com/2014/06/04/world/asia/tiananmen-era-students-different-path-to-power-in-china.html
Please read the article. He WAS arguably the most deeply connected financier in China. After we published, he made a statement thru a spokesperson, evaporating any distance he had from the transaction w/ Xi's older sister. Read about it here. (37/x). https://www.nytimes.com/2014/06/18/world/asia/chinas-president-xi-jinping-investments.html
So by Nov. 2012, Li Zhanshu was on the Politburo. His daughter was rising up the ranks of CCBI. Xi Jinping was now the Party Boss and his sister was in a joint venture with CCBI. CCBI's president (总经理）was Yang Hongwei, a business associate of Xiao Jianhua. (38/x)
I need to add that Yang Hongwei was CCBI's boss when it did the private placement for shares of Dalian Wanda Commercial Properties, the owner of AMC Theaters in the US, back in 2009. One of the buyers was a Beijing company called Qinchuan Dadi. Remember them? (39/x)
You can read more about Dalian Wanda and its connections to China's top leaders here. (40/x). https://www.nytimes.com/2015/04/29/world/asia/wang-jianlin-abillionaire-at-the-intersection-of-business-and-power-in-china.html
So all this is very interesting but then, in late Jan. 2017, Xiao Jianhua was abducted from his apartment at the Four Seasons in Hong Kong and spirited across the border to the mainland. It's the stuff of movies, if Hollywood had the nerve to write truthfully about China. (41/x)
(42/x). You can read about that right here: https://www.nytimes.com/2017/02/10/world/asia/xiao-jianhua-hong-kong-disappearance.html?_r=0
(43/x) - and here's more on Xiao Jianhua's links to Dalian Wanda and Yang Hongwei. https://www.nytimes.com/2017/08/10/business/dealbook/china-wanda-xiao-jianhua.html
(44/x) - So Li Qianxin, daughter of the No. 3 CCP leader, is now chairwoman of CCBI, the company that went into business with the older sister of the No 1 leader. The head of CCBI at that time was a business associate of Xiao Jianhua, the abducted billionaire.
(45/x) - It is a RICH vein of reporting IMHO. And it needs the attention of the amazing corps of Chinese investigative reporters. But they can't do it, which is deeply tragic.
(46/x) - In years past, some people would criticize me for my China reporting, engaging in what we now call whataboutism. What about the Kennedys, the Bushes, the Clintons. You have your own political dynasties in the USA, no? Whats the difference?
(47/x) - It was easy to bat back those softballs. Corruption in China was on a different level, I'd say, and it was totally nontransparent. Of course now I can't hold my head as high, given the graft and self-dealing we see in America these days...but....
(48/x) - The fact is we KNOW about the corruption in the USA, and if we don't, legions of reporters and investigators are working to uncover it. But in China, these potentially massive stories are locked away - literally, never to see the light of day.
(49/x) Chinese reporters can't write about it. Hong Kong reporters lose their jobs when they write about it. And now, the American reporters that DID write about it are mostly no longer allowed in the country. It is tragic, because China is a country of such enormous consequence.
(50/50) - I hope we can continue as an institution to do these. For now, we can no longer visit the tombstones. We can't knock on doors in Beijing, Shanghai or Nangoucun. I hope that changes, and hope some day the Chinese government values the role a free press has to play. END
51/51 - IMPORTANT CORRECTION: the observant @MattSchrader_DC points out that the third Kanghai co-founder worked at the Fed BEFORE the company was founded in 2000. I didn’t mention his name and have no reason to think he is involved in anything that happened in subsequent years.
