China Resources (Holdings)

The colourful mainland and Hong Kong history of graft-hit China Resources

Former chairman is being probed for discipline and law violations, but given its history huge company is likely to survive any scandal

PUBLISHED : Wednesday, 23 April, 2014, 12:50am
UPDATED : Wednesday, 23 April, 2014, 12:50am

China Resources (Holdings), which has been under the media spotlight in the past week over news that its former chairman has been probed by the Communist Party's graft watchdog for corruption, has a past that is anything but ordinary.

The company, formerly known as Liow & Co, was established in Hong Kong in 1938 by Yang Lianan, with the backing of Zhou Enlai and Chen Yun - two of the Communist Party's eight elders. Its original purpose was to use funds raised from the public to procure material to support Chinese resistance to the Japanese in the second world war.

The company was renamed China Resources in 1948. In 1952, it became the principal agent of the mainland's import and export trade through Hong Kong, and organised the first Canton Fair in 1957.

It was under the control of the mainland's Ministry of Foreign Trade and Economic Co-operation until 1999, when it was put under the direct administration of the central government.

Its Ng Fung Hong unit, set up in 1962, was the main supplier of live and frozen meat from the mainland to Hong Kong. Today, it still has a monopoly on fresh beef distribution in Hong Kong.

In the early 1970s, China Resources sent petroleum products from the mainland to Hong Kong during the global oil crisis.

The firm gradually expanded into mainland manufacturing in the late 1970s, and invested in the retailing, property, power generation and infrastructure sectors in the 1980s and 1990s.

Its first listed company, retailing-to-brewing conglomerate China Resources Enterprise, was among the first few mainland firms to float on the Hong Kong bourse, in 1992.

Today, the holding company has more than 2,300 companies, with some 420,000 employees. It has five Hong Kong-listed units, three of which - China Resources Enterprise, China Resources Power and China Resources Land - are constituents of the Hang Seng Index. It also has six mainland-listed units.

China Resources was ranked by American magazine Forbes as 187th among the world's largest 500 firms last year.

Despite the probe by the Communist Party's graft watchdog, the Central Commission for Discipline Inspection, into former chairman Song Lin for suspected serious party discipline and law violations, the company looks set to continue to receive Beijing's support.

On a visit to one of its Vanguard supermarkets in Beijing, State-owned Assets Supervision and Administration Commission deputy director Wang Wenbin said the watchdog would "fully support [CRH's] reform and development," China Resources Holdings said in a statement on its website on Monday.