China Resources (Holdings)
China Resources (Holdings) is a state-owned conglomerate registered in Hong Kong. The company is the parent of China Resources Enterprise, China Resources Power and China Resources Land, which are listed as Hang Seng Index constituent stocks and known as the Three Blue Chips of China Resources.
Ex-journalist to take China Resources 'corruption' files to Hong Kong investigators
Former journalist Li Jianjun also has a personal stake riding on the graft case
An independent mainland investigator with ambitious plans to topple the chairman of one of the country’s largest state-owned conglomerates with corruption charges has announced he would visit Hong Kong’s top anti-graft bodies on Monday and turn over evidence on alleged mismanagement, negligence and corrupt activities involving dozens of senior corporate executives.
Li Jianjun, 36, a chain-smoking former investigative reporter from the coal-rich province of Shanxi, held court in his hotel room in Hong Kong at the weekend as journalists continually rang his doorbell seeking interviews. Stacked on the floor of his bathroom and strewn on his hotel bed were large hardback folders filled with freshly printed documents.
“Photograph anything you want,” said Li, lighting up another cigarette and gesturing at the documents. “These will all go to the ICAC and Commercial Crime Bureau,” he said, referring to the Independent Commission Against Corruption and the Hong Kong police unit dealing with commercial crimes.
An ICAC press officer who declined to give his name said on Saturday that the commission could not comment on individual cases, but said Li was welcome to visit ICAC’s 24-hour report centre in North Point any time.
For more than four months, Li had been airing accusations via the internet against Song Lin, 50, the chairman of China Resources (Holdings), a state conglomerate that employs almost half a million people and has estimated assets of nearly US$120 billion. The group was ranked No 187 on the Fortune 500 list of the world’s largest companies this year.
Li has said Song was responsible for pushing through suspicious deals in which China Resources Power, one of the group’s Hong Kong-listed subsidiaries, purchased several coal mines in Shanxi for more than 10 billion yuan (HK$12.6 billion), times more than the mines’ real value.
Although the accusations seemed to have had little impact in the first few months, they made national headlines when Wang Wenzhi, another investigative reporter working for a newspaper under the official Xinhua News Agency, unleashed similar allegations via his social media account last month. Li and Wang deny ever knowing or having worked with each other, but both have been basking in the media spotlight since state watchdogs including the National Audit Office in Beijing have started investigations into the case.
China Resources (Holdings) has said that the allegations were “libellous and ungrounded in facts”, but that it welcomed the public to come forward with leads on potential misdeeds. Song, who has a central government rank equivalent to that of a deputy government minister, has declined to comment on the accusations, but told reporters last month that he was still working in his Hong Kong office and denied rumours he had fled the city.
In dozens of media interviews, Li and Wang have said they have reliable sources well-informed of the allegedly illegal activities within China Resources and promised to unveil more “explosive” evidence as investigations in Beijing and Hong Kong progress.
But unlike the Xinhua journalist, Li, who now calls himself a media consultant and investor, makes no secret about his personal stakes in releasing information on this particular case.
He learned about the alleged corrupt deals behind the coal-mine sales while investigating some long-term “enemies”, powerful government officials and businessmen in his home province of Shanxi, who had financial interests in the mines, Li said. By bringing it to public attention, he wanted to “take down” key figures on both the selling and buying ends of the deal.
“They must go down and go to jail. Only then could I feel safe, and I would be making a big service for public interests as well,” he said with a smile. Li said he had received multiple death threats while working in Beijing on the case, and managed to fend off several abduction attempts on him and his family members.
Shanxi Jinye Coal and Coking Group, a local firm that was selling the mines to China Resources Power, could not be reached for comment.
Li’s ambitions go far beyond meting justice. He said he was placing his next bet on Hong Kong’s rule of law to turn his investigative practice into a profitable business. He plans to set up a research and investment firm in the same model as Muddy Waters and Citron, shorting agencies that took overseas-listed Chinese companies by storm a few years ago by publishing negative reports on many of them and publicly shorting their stocks.
“With my strong network of sources on the mainland, I can do a much better job than Muddy Waters or Citron Research,” he said.
With almost a decade of muckraking reporting under his belt, Li seems to ooze confidence despite the fact that his upcoming meeting with ICAC would be his first time working with law enforcement in the special administrative region.
The swashbuckling Shanxi native, who said he studied history at university and was fascinated with “the art of power politics throughout Chinese history”, made his name in the Chinese circle of hard-hitting investigative journalists with a series of reports exposing police corruption in his home province since the mid-2000s.
“Song Lin isn’t even the first vice-ministerial level official I have taken on,” he said. Early this year, Yi Junqing, a senior Communist Party propaganda official, lost his job after a lengthy account written by a female researcher in his department appeared online, detailing an extramarital affair the two had had.
Li said he was the first person to post the 100,000-word account online after stumbling upon it on the computer of a source. But all the original posts have since been deleted, and this claim could not be independently verified.
Li Su, a partner at Beijing-based consulting firm Hejun Vanguard Group, which specialises in small shareholder litigation on the mainland, said he had worked with and supported Li on the case against China Resources Power.
“This is clearly a typical case of illegal profiteering in the nationalisation process of Shanxi coal mining assets in the past years,” he told the South China Morning Post by phone. “I am convinced Li is right – the value of the coal mines has been grossly overestimated in the China Resources deal.”
However, he said Li’s idea of starting a Hong Kong-based shorting agency exploiting the rampant corruption within Hong Kong-listed state firms might be far-fetched.
“He is a dedicated man, very aggressive,” Li Su said. “But this is very difficult” due to the financial and legal expertise required to pull off shorting attacks in Hong Kong.
Li Jianjun remained upbeat.
“Money is not a problem. We have hired lawyers to take care of the legal stuff.” He said he had lined up financial backers willing to bankroll him for hundreds of millions of yuan on the new shorting venture.
“There is never a lack of money or good intentions in today’s China,” he said. “What we are short of are capable and courageous men of action.”