Empire lacks leader after tycoon detained

Apparent arrest of Sichuan Hanlong chief casts long shadow over conglomerate's plans

PUBLISHED : Tuesday, 02 April, 2013, 12:00am
UPDATED : Tuesday, 02 April, 2013, 4:57am

Even by the rough-and-tumble standards of China's entrepreneurs, billionaire Liu Han's brushes with death mark him out.

After dodging a hitman's bullets in 1997, which led to the execution of a rival tycoon and two of his relatives almost a decade later, Liu is ensnared in more killings. This time, his own brother is the suspect, and the Sichuan Hanlong founder is being held by police for helping him evade capture over a 2009 triple murder, according to state media reports.

The arrest throws into jeopardy Hanlong's planned mining investments, casting doubt on the future of Sundance Resources' US$4.7 billion iron-ore project in West Africa and General Moly's molybdenum mine in the US. Liu's detention hasn't been confirmed by authorities and there has been no official indication of who is now running his empire, which spans energy, real estate, chemicals and technology.

Liu's rise to riches and sudden disappearance are a stark reminder of the risks investors take when dealing with opaque private businesses in China, where fortunes depend on political ties and the favours of state entities, and even the wealthiest entrepreneurs can vanish if they lose the patronage of powerful government allies.

According to a March 20 report in Shanghai Securities News, Liu and his ex-wife were detained in Beijing at the end of the annual meeting of China's legislature. At that meeting, Xi Jinping took over as president and Li Keqiang as premier with a pledge to fight corruption and abuses of power.

Arriving for the meeting in a Ferrari and wearing a fur coat, Liu told the Wall Street Journal how he made his seed money speculating on steel pipes while still in his 20s, parlaying that into a fortune trading on China's newly created markets in the 1990s.

Today, Liu's web of businesses includes five publicly traded companies and more than 30 closely held units. By 2010, the group, founded the year of the botched hit, had more than 12,000 employees worldwide and more than US$2.5 billion in revenue. Liu was the 314th richest person in Greater China, with wealth of about US$1 billion as of February 2013, according to Shanghai-based Hurun Report.

At home, Liu was best known for his philanthropy. He sits on the board of poverty-relief charity China Glory Society with Hangzhou Wahaha Chairman Zong Qinghou, whose US$22 billion fortune makes him the country's richest man, according to figures from the Bloomberg Billionaires Index.