Warren Buffett

'Buffett of China' faces nation's priciest divorce

PUBLISHED : Monday, 06 February, 2012, 12:00am
UPDATED : Monday, 06 February, 2012, 12:00am

The messy break-up of investment guru Zhao Bingxian, known as China's Warren Buffett, and his wife of more than two decades is being described as the mainland's most expensive divorce.

Zhao's wife, Lu Juan, has been waging a long battle for half the family's assets, valued at more than 2 billion yuan (HK$2.5 billion) - mostly from the 49-year-old businessman's China Capital Investment Group, where he is chairman and president, and which has stakes in listed companies in Shanghai and Shenzhen.

Lu has accused him of domestic abuse and having extramarital affairs, the Beijing Morning Post says. She is seeking an equal split of the family assets after the divorce and full custody of their 23-year-old daughter and nine-year-old son.

The couple married in 1988 when they were serving in the army. After they were discharged in 1993, they founded their first company and earned their 'first bucket of gold' in the mainland's budding stock market by speculating on stock- buying quotas.

In those days, only the holders of certificates issued by the Shanghai Stock Exchange were eligible to participate in lucky draws to buy shares. As more companies went public from 1992, investors like the couple scrambled to buy certificates to improve their stock-buying chances.

After years of trading, the family assets have snowballed and now include more than half of the total shares in Wohua Pharmaceutical, which is worth more than 700 million yuan; more than 300 million yuan worth of stocks in Luolai Home Textile; and a 300 million yuan stake in Shanghai Guangdian Electric.

Lu has written on her blog that her husband turned violent after the family became wealthy, and that the abuse got worse after she gave birth to their son in 2003.

'He threw tantrums ... for no reason and sometimes became violent,' she said. 'He beat me up within a month after giving birth to our son because he heard him crying.'

Lu told the Legal Evening News that she called the police in February 2009 and again in February 2010 after severe beatings by Zhao, but she said officers refused to intervene because it was a 'family dispute'.

She also claimed receiving calls from various women about their affairs with Zhao over the years.

The Beijing Evening News quoted Lu as saying she had filed for divorce in July 2010 but had to withdraw the suit after Zhao failed to show up for three hearings, citing business trips and illness. She filed another divorce suit in August last year, but Zhao again failed to attend the hearing.

'My divorce lawsuit proceeding is far more difficult than others just because my husband was called the Buffett of China,' Lu said on her blog.

Lu also wrote that she poured 'blood and tears' into the management of their firm and that she had supported the entire family while Zhao studied for his master's degree in finance at Shanghai Jiao Tong University.

After the divorce attempts, she tried to seize the company's safe in an attempt to force Zhao to go to court, only to be detained for 37 days after Zhao called the police, Lu told the Beijing newspaper.

Zhao and the Tongzhong District People's Court, which is handling the lawsuit, could not be reached for comment.

Divorces have the potential to hurt a tycoon's businesses. Last May, the bitter divorce of Gary Wang Wei, the founder of mainland online video company tudou.com, and Yang Lei derailed a planned initial public offering on Nasdaq. The IPO proceeded three months later.

Similarly, a US IPO planned by mainland classified website Ganji.com was hampered by the divorce of founder Yang Haoran. The case has been deadlocked for two years, with wife Wang Hongyan accusing him of transferring Ganji shares without her knowledge during their marriage.