China’s millionaires and billionaires have reason to wonder whether to get rich – it may even open them up to allegations of corruption.
HONG KONG: Nearly three decades ago, Deng Xiaoping kick-started China’s economic rise with an inspirational message for private entrepreneurs. “To get rich,” he said, “is glorious.” Millions of his countrymen enthusiastically embraced the economic reforms he ushered in, and got rich in double-quick time.
But today, China’s growing number of millionaires and billionaires have reason to wonder whether to get rich – and gain enhanced social visibility – may prove troublesome, and even opening them up to allegations of corruption.
Earlier this week, Forbes magazine named Huang Guangyu, 37, head of electronics retailer GoMe Appliances, China’s richest man, with a personal net worth of $2.3 billion. That’s almost twice as much as it was last year, yet Huang wasn’t celebrating either the honour or the doubling of his fortune. That’s because he’s been facing the heat of intense media speculation that his empire is under investigation for alleged improprieties linked to $165 million in home and auto loans secured from the Bank of China between 1997 and 2004.
Caijing, one of China’s most influential business magazines with an impressive record of investigative journalism, reported that investigators were probing whether the loans were pumped illegally into the GoMe retail chain and construction projects or transferred overseas. The charges were serious enough to warrant a suspension of trading in GoMe shares on the Hong Kong stock exchange. In a statement, the company, however, denied that neither Huang nor any of his companies were involved in any illegal loans.
Huang’s entrepreneurial journey is an inspirational rags-to-riches story: at age 16, the school drop-out from southern China started by selling radios and electronic gadgets on a Beijing roadside shop. Today, the GoMe empire is China’s largest home appliances retailer and is taking on the giants of the retail world – including Wal-Mart, Carrefour and Best Buy.
It’s been a bad season for other billionaires in China too. Last month, Zhang Rongkun, 33, who was ranked China’s 16th richest man in 2005, was jailed following the ongoing investigations into the Shanghai pension fund scandal. Zhang’s company, Fuxi Investments, is said to have secured unauthorised loans from the social security fund and used it for infrastructure projects. (Forbes didn’t consider ranking him this year.)
Another billionaire, Zhou Zhengyi, ranked 11th in 2002, has recently been released from jail after serving three years for fraud and stock manipulation.
Given the number of high-fliers who have come crashing down in recent months on charges of fraud or tax evasion, it’s no wonder that China’s new rich are happy to remain off the radar of the “rich lists”.
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