Top Chinese magazine attacks fugitive tycoon over Abu Dhabi deals

Prominent Chinese financial magazine Caixin launched another salvo at fugitive tycoon Guo Wengui on Monday, accusing him of misusing funds from Abu Dhabi backers.

The report also shed light on how Guo financed his business by leveraging his repackaged assets.

Caixin is suing US-based Guo in the United States for defamation and has reported on his business ventures before, reports Guo has rejected.

Monday’s cover story claimed Guo borrowed US$1.5 billion from the Abu Dhabi backers in 2014 to inject into their jointly held fund ACA Capital.

It claimed Guo convinced the backers to accept his Chinese assets as collateral, although most of the property and stocks were already pledged to his Chinese creditors.

And instead of investing the money in “financial institutions” as promised, Guo used some of the funds to repay debts, renovate his home and buy a yacht, the report quoted a former employee as saying.

In 2015, Guo moved to the United States after his associate, former state security vice-minister Ma Jian, came under investigation for corruption.

When two Abu Dhabi board members of the joint fund visited Guo in the United States, they were told Guo was still backed by Chinese leaders, according to the report.

In May 2015, Guo received an extra US$1.5 billion loan from Abu Dhabi using his flat at The Sherry-Netherland Hotel in New York as part of the collateral.

Caixin said Guo used the money and various bank loans to buy 42 per cent of Hong Kong-listed shares in Haitong Securities, China’s second-biggest brokerage by assets, only for the investment to shrink in the stock market meltdown of 2015.

The report said Guo last year promised to transfer all his mainland assets to ACA Capital and his control of the joint fund to the Abu Dhabi authorities. In return, the Abu Dhabi backers agreed to double their loans to Guo to US$6 billion.

But Caixin claimed Guo was unlikely to meet the terms of the deal because his mainland assets had been frozen by the government.

It was not possible for the South China Morning Post to verify the claims in the report and there was no immediate response from Guo or the Abu Dhabi authorities to requests for comment on Monday night.

In a report published in May, Caixin said former British prime minister Tony Blair had introduced Guo to the Abu Dhabi royal family.

Guo denied the report in a video posted on Twitter, adding such articles were aimed at discrediting him.

Media outlets directly controlled by Beijing have also been publishing reports about Guo’s alleged wrongdoings since he started airing claims of corruption in the Communist Party online.

In April, Beijing asked Interpol to issue a global “red notice” for Guo’s arrest.