Chinese multimillionaire Chen Guangbiao takes swipe at fraud accusations online

Mainland tycoon Chen Guangbiao – who generated headlines for his attempt to buy The New York Times through a New York PR event featuring much bombast and a now-infamous business card – is fighting allegations that the product that made him rich in the 1990s was fake and that he has been operating his business illegally since.

An article alleging fraud surfaced online last year, but only began circulating widely days after Chen’s outlandish bid for the prestigious newspaper.

In a statement published on his Sina Weibo microblog on Tuesday, the multimillionaire issued a rebuke, saying: “If I have been operating [my] business illegally, why would legal and quality supervision departments tolerate that I remain at large? I would have been busted a long time ago.”

“For all the false and defamatory remarks, I will resort to legal measures,” he said. Chen also said he attributed his success to the Communist Party’s “opening up” policy and his honest, law-abiding hard work.

The article, which appeared on an online forum, claimed the illness-detecting machine that earned Chen his first “bucket of gold” was in fact a scam and violated product laws.

The machine was sold in the ‘90s by Chen’s first company, Nanjing Jinweili, which manufactured electronic medical equipment. To use the disease detector, patients would clip a wire to their ear, which would send electric pulses through the body, and the potentially sick organs would be shown on a monitor.

The article claimed the machine’s function was a “total lie” and had “absolutely nothing to do with illness detection”. “Chen is a speculator who rose to power by selling fake medical equipment and defrauding patients and elders,” the article said.

A bulletin published by State Food and Drug Administration in 1999, and still accessible online, stated that Chen’s illness detection machine’s advertisement contained false information. It said his company promoted the machine as having an X-ray computed tomography function (or the ability to show images of scanned body parts in sections or slices, as in a CT scan), but in fact it did not have this.

Chen did not address this specific charge in his post.

Chen is now the chairman of Jiangsu Huangpu Recycling Resources and made his fortune by recycling construction materials. He is considered a billionaire in yuan, but a multimillionaire in US dollars.

Chen remains a controversial figure. While his high-profile acts of charity have earned him fame and countless official recognition, he is often criticised for what they deem a flamboyant or “self-promoting” brand of philanthropy, casting doubt on his sincerity.

After an earthquake struck Lushan county, Yaan, in April last year, he came dressed in military camouflage and a bag filled with 300,000 yuan, and thrust bills into the hands of the survivors. He donated more than 100 million yuan for post-quake construction in Wenchuan, Sichuan province, in 2008, and said he himself carried hundreds of victims to safety.

He also made similar visits to post-Fukushima-disaster Japan and once sold “canned fresh air” to residents as Beijing was blanketed in smog.