Chinese leader Wen Jiabao’s family accumulate billions during his time in office

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The family of Wen Jiabao, the Chinese premier, has controlled assets worth at least $2.7 billion (£1.67 billion), according to a detailed review of company and regulatory filings.

Wen Jiabao said it a matter of 'regret' that he failed over his term of office to remove the arms embargo

Family of Wen Jiabao control assets worth at least £1.67 bn according to detailed review of company and regulatory filings.
Malcolm Moore

By , Beijing

2:30AM BST 26 Oct 2012

The revelation of the Wen family fortune is another damning example of how relatives of China’s top leaders often trade on their political connections to amass huge wealth.

The scrutiny of the family’s extensive holdings was published by the New York Times on both its English and Chinese language websites. Both were made instantly inaccessible within China by government censors.

The report came as the Communist party prepares to unveil a new generation of leaders for the first time in a decade, and with public confidence in its government badly bruised by a series of scandals.

Mr Wen, 70, is about to retire after a ten-year term as China’s premier.

During that time, he has often cast himself as a reformer determined to stamp out the corruption, cronyism and abuse of power that has become systemic in the Communist party.

In March, he gave a speech to the State Council in which he warned that the “greatest danger” facing the Communist party is graft and that the party could be dethroned if no action is taken. “If this issue is not resolved, the nature of political power could change,” he said.

However, rumours that Mr Wen’s family, and in particular his wife, have exploited his premiership to build their fortunes have circulated for years.

The report in the New York Times confirmed that Mr Wen’s mother, son, daughter, younger brother, brother-in-law and his wife had all become rich during his tenure.

The newspaper is likely to face severe retribution for its investigation: when Bloomberg News reported in June that the family of Xi Jinping, China’s presumptive next president, had a wealth of at least $376 billion, its website was blocked and Chinese banks were told to stop using Bloomberg’s financial data services, potentially costing it millions in lost revenue.

The New York Times only started its Chinese language website at the end of June.

Top Chinese leaders like Mr Wen are not supposed to have family wealth or lucrative business careers. They are expected to live on modest salaries, thought to be around 140,000 yuan (£14,000) a year for a government minister.

But many leaders have intricate financial dealings, often through their children and other relatives.

The New York Times said Mr Wen’s mother, 90-year-old Yang Zhiyun, who was a schoolteacher, held an investment in Ping An, one of the world’s largest financial services companies, worth $120 million five years ago.

The name recorded on his mother’s shares was Taihong, a holding company registered in Tianjin, Mr Wen’s home city.

The report said Mr Wen’s relatives had accumulated shares in banks, jewelers, tourist resorts, telecommunications companies and infrastructure projects, often using aliases, holding companies and offshore entities.

The family’s stake in Ping An was worth some $2.2 billion in 2007, the last time the holding was disclosed in a public document. Ping An said in a statement that it did “not know the background of the entities behind our shareholders.”

Duan Weihong, a wealthy businesswoman whose company was used as the vehicle to buy the shares, claimed the stakes as her own and said her relatives had found other names, including those of Mr Wen’s family, to hold the shares for her to conceal the size of her stake.

Mr Wen’s family also reportedly had interests in “a villa development project in Beijing; a tire factory in northern China; [and] a company that helped build some of Beijing’s Olympic stadiums, including the well-known ‘Bird’s Nest'”

Mr Wen’s wife, Zhang Beili, reportedly helped to control the Chinese diamond market, while his younger brother, Wen Jiahong, was said to control $200 million in assets, including wastewater treatment plants and recycling businesses.

Wen Yunsong, or Winston Wen, sold a technology company he started to Li Ka-shing, the Hong Kong tycoon, for $10 million and established New Horizon Capital, now one of the country’s largest private equity firms.

A general belief in China that corruption in the Communist party was confined to the lower ranks, while top leaders kept their hands clean, has been exploded by a series of recent scandals, including the fall of Bo Xilai and the death in a Ferrari crash of the son of Ling Jihua, a close aide to the president.

Chen Jieren, the nephew of He Guoqiang, of China’s nine most senior Politburo members, told American diplomats in 2009 that the Communist party has carved up the country’s economic “pie” among its leaders.

“It was ‘well known,'” Chen stated in a cable since released by Wikileaks, “that former premier Li Peng and his family controlled all electric power interests; Politburo Standing Committee (PBSC) member and security czar Zhou Yongkang and associates controlled the oil interests; the late former top leader Chen Yun’s family controlled most of the banking sector; Politburo Standing Committee member Jia Qinglin was the main interest behind major Beijing real estate developments; Hu Jintao’s son-in-law ran; and Wen Jiabao’s wife controlled China’s precious gems sector.”


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