[Epoch Times December 18, 2021](Reported by Epoch Times reporters Ning Haizhong and Luo Ya) Wang Chaoyong (real name Wang Chaoyong), known as the “Godfather of Chinese Venture Capital”, was lost for two weeks on the 16th He was accused by many media of being arrested by the Beijing police, and Xin Zhongli, which he founded, was exposed to huge debts and involved in the transfer of interests. Wang Chaoyong was born in the grassroots, but his background involved many powerful families of the Chinese Communist Party. As Xi Jinping continues to cleanse the financial world, the underlying cause of Wang’s accident has attracted attention.
Debt bursts into crisis
In the early morning of December 16, Xinzhongli, a well-known private equity investment institution in China, issued an announcement confirming that Wang Chaoyong, the actual controller of the company, had lost contact. According to the announcement, Xinzhongli will suspend trading from December 16, 2021, and is expected to resume trading before December 29, 2021.
A detention notice issued by the police in Chaoyang District of Beijing revealed that Wang Chaoyong was arrested on November 30, 2021, on suspicion of embezzlement. The letter Zhongli announcement stated that it has not yet received a formal notice or request for assistance in investigations from the public security, judicial and other agencies.
Public information shows that as of December 31, 2020, there are 36 trust funds under management (including 6 funds in liquidation), with a cumulative subscription scale of 16.125 billion yuan and a paid-up scale of 11.201 billion yuan.
China Business News reported that Wang Chaoyong and Xin Zhongli were in crisis because “huge debts are due one after another, and court summons are sent one by one,” and “can’t take it anymore.”
According to reports, the acquisition of Huicheng Technology 5 years ago became Wang Chaoyong’s largest Waterloo. In recent years, Xinzhongli has gone downhill. In the first half of this year, Xinzhongli lost 288 million yuan, and its net profit decreased by 348% year-on-year. At the same time, the company’s interest-bearing liabilities balance was 704 million, of which short-term loans were 92.16 million and current liabilities due one year were 144 million. The balance of monetary funds is only 173 million. In addition, the company’s other payables reached 1.556 billion, an increase of 52.96% year-on-year.
On December 6, Xinzhongli disclosed that the company is currently facing 6 lawsuits with a total amount of more than 1.3 billion.
The report also said that Wang Chaoyong and Xin Zhongli have been repeatedly taken supervisory measures for allegedly transferring interests, embezzling the equity of the companies they manage for other purposes, concealing debts and litigation information, etc.
Xinzhongli did not immediately respond to the Epoch Times reporter’s request for comment.
One of the first mainland students to work on Wall Street
Wang Chaoyong is a well-known figure in China’s venture capital circle. He was once known as the “Godfather of Chinese Venture Capital” and “Investment Majority”.
Searching the Internet, Wang Chaoyong’s background keywords include: Zhu Rongji, Prince Chen Yuan, China Stock Market Crash in 2015, CITIC Securities, Liu Lefei.
Wang Chaoyong, born in 1965, is a native of Piaopu Village, Zhangdi Town, Qichun County, Huanggang City, Hubei Province. He was born as a civilian, but he was one of the first mainland students to work on Wall Street.
Wang Chaoyong entered Tsinghua University at the age of 19 and sent to the United States to study abroad at the age of 20. He was the first batch of graduate students of Tsinghua School of Economics and Management, when Zhu Rongji served as the first dean of Tsinghua School of Economics and Management. Zhu Rongji’s visit to the United States brought back the quota for studying abroad, which was eventually given to Wang Chaoyong. According to Wang Chaoyong, before leaving, Zhu Rongji also told him to study finance.
As early as the mid-1980s, Wang Chaoyong worked as a senior manager of the investment department at JPMorgan Chase Bank in the United States. In the 1990s, he successively served as co-director of the President’s Office and vice president of Asia at Standard & Poor’s and Morgan Stanley. In 1998, he was invited by the China Development Bank to serve as a consultant. During this period, China Development Bank was presided over by Chen Yuan, the son of the princeling and CCP veteran Chen Yun. After his term of office expired, in 1999, Wang co-founded Xinzhongli International Holding Company with international investment institutions. This is one of the earliest institutions engaged in venture capital and private equity investment in China.
Wang Chaoyong himself has a long list of titles such as co-chairman of the Venture Capital Fund Professional Committee of the China Fund Industry Association and member of the International Cooperation Committee of the All-China Federation of Industry and Commerce.
Wang’s wife was once rumored to be investigated due to the Chinese stock market crash
Wang Chaoyong’s wife is Li Yifei, the former chairman of Man Group China, the world‘s largest listed hedge fund. According to the news released by Insman, Li Yifei has retired in 2019.
Li Yifei was involved in the Chinese stock market crash six years ago.
A rare stock market crash broke out in the Chinese stock market in the summer of 2015. Beginning on June 15, the stock market plummeted. Although the authorities invested trillions of dollars to rescue the market, the two cities still plummeted. The market value of the stock market has shrunk by about $5 trillion.
This round of stock market disaster is rumored to be an “economic coup” in which Jiang faction and other anti-Xi forces in the party joined forces to maliciously sell short. The Propaganda Department controlled by Liu Yunshan, a member of the Politburo Standing Committee at the time, had repeatedly argued against the rescue in Beijing, saying that the rescue was invalid.
After the stock market crash, the Xi Jinping authorities launched an anti-corruption investigation into the financial and securities industry. Senior officials such as Cheng Boming, the general manager of China’s largest brokerage firm CITIC Securities, who participated in the rescue, were successively investigated, and the company’s chairman Wang Dongming retired. Zhang Yujun, assistant to the chairman of the China Securities Regulatory Commission, and Yao Gang, vice chairman of the China Securities Regulatory Commission, were regarded as “inner ghosts” and they fell in succession.
Behind CITIC Securities is CITIC Group Corporation. CITIC Group was founded by the “red capitalist” Rong Yiren in the late 1970s. “CITIC” companies involved in various economic fields, mostly controlled by the second generation of red and the second generation of officials. Including Liu Lefei, son of Liu Yunshan, former member of the Jiang faction.
During the stock market disaster, Liu Lefei served as the chairman and CEO of CITIC Industrial Fund, as well as a director and vice chairman of CITIC Securities. After the stock market crash, Liu Lefei was forced to resign as vice chairman of CITIC Securities in December 2015, but still controlled CITIC Industrial Fund.
And on August 31 of this year, Li Yifei, then chairman of Man Group China, also reported that the stock market was taken away by the police to assist in the investigation. But Li Yifei’s husband Wang Chaoyong denied that Li was under investigation. On September 6, Li Yifei said in an interview with the media that she was “conducting an industry meeting” and returned home on September 4.
Public reports show that Wang Dongming, then chairman of CITIC Securities, and Wang Boming, founder of Caijing magazine, are brothers. His father is former Vice Foreign Minister Wang Bingnan of the Communist Party of China, and Li Yifei is a good friend of Wang Dongming and Wang Boming’s brothers. There are also many intersections with CITIC Securities.
Xi Jinping publicly called on April 25, 2017 to “strengthen the party’s leadership over financial work.” Since 2017, CCTV began to disclose some high-level information during the stock market crash. It clearly defined “this wave of stock market soaring and falling, which is a financial crime.”
In 2017, Xiang Junbo, the former chairman of the China Insurance Regulatory Commission, and Yang Jiacai, assistant to the chairman of the China Banking Regulatory Commission, were also dismissed. Xiao Jianhua, the founder of the Tomorrow Department, who is widely regarded as the white glove of the powerful, and Wu Xiaohui, the founder of Anbang Group, who was the grandson-in-law of Deng Xiaoping, both had accidents in 2017.
Wang’s accident is related to Xi Jinping’s establishment of the Beijing Stock Exchange?
In October of the year after the Chinese stock market crash in 2015, Xinzhongli was listed on the NEEQ. It was mainly controlled by Wang Chaoyong and his wife Li Yifei, with a 63.59% shareholding ratio, of which Wang Chaoyong held 30.71%.
After that, Xinzhongli was once a star company on the New Third Board. However, in recent years, the performance has suffered greatly, and it has also been plagued by lawsuits. Xinzhongli lost 1.8 billion yuan in 2020 and the first half of 2021. In December 2018, it planned to delist the NEEQ. However, the protection measures for dissenting shareholders have not been completed.
Since September this year, the Chinese Communist Party has begun to target private equity giants. On September 2, Xi Jinping announced the establishment of the Beijing Stock Exchange (hereinafter referred to as the Beijing Stock Exchange) to deepen the reform of the New Third Board. The next day, the Beijing Stock Exchange was established, and the central bank issued a report saying that it must maintain the smooth operation of the stock market, bond market, and foreign exchange market, and strictly guard against the impact of external risks.
On September 7, private equity giant Tianyan Capital announced that it would phased out its fundraising work. Since then, many well-known quantitative private equity companies such as Magic Square and Jiu Kun have also been interviewed by the Chinese Communist Party’s regulatory authorities.
On November 15, the Beijing Stock Exchange opened. And Wang Chaoyong’s WeChat circle of friends stayed on November 29, two weeks ago, and the content was related to the Beijing Stock Exchange: “I hope that there will be liquidity, and the Beijing Stock Exchange platform should be used.”
Current affairs commentator Chen Simin wrote in The Epoch Times that the financial “external risks” that the Beijing authorities want to guard against are not actually overseas, but within the country. Take the 2015 stock market crash as an example. A lot of information shows that foreign capital has become a scapegoat for air raids, and the real biggest short-holders are inseparable from the vested interest groups formed by the powerful.
Industry insiders expose bad rules for private equity
Mr. Zhu, a former senior practitioner in the financial industry in Shanghai, analyzed some of the corrupting hidden rules of the private equity industry to The Epoch Times.
He said: “The regulatory requirements for public offerings are higher and relatively difficult to operate. Therefore, almost all expensive gloves are used to manipulate stock prices in the form of private equity.”
One of their constant and fundamental means of manipulating stock prices is to use “reverse”, Mr. Zhu said, “that is, in the process of copying the stock price to high or low, buying and selling are all their own different accounts, so The stock (bargaining chip) is always on hand. When it reaches the key core position that really needs to purchase or ship, it will use policies or news to entice small and medium retail investors to follow suit.”
Mr. Zhu said that the principle of manipulating stock prices has not changed in the past 100 years, but under the rule of the CCP, the law serves the power and the rich without checks and balances, and the CCP’s traders have brought the bad tactics to the extreme.
He said that the major international private equity and hedging activities are all learning from the CCP. why? Not to learn technology, but to learn the evil idea of omnipotence. The CCP has no ethical restraint, and there is no failure to do it, only the unexpected.
Mr. Zhu said, including Wang Yongchao, Jiang Zemin’s grandson Jiang Zhicheng, and Zhu Rongji’s son all went to the West to study and then came back. They are learning financial concepts, knowledge, and technology, and they cannot learn the true concept of game fairness in the West. This is critical. Because the environment and soil are completely different. Anything that gets into the hands of the CCP becomes the worst and dirtiest.
Yuan Hongbing: Wang Chaoyong Incident Involves High-level Political Struggle in the CCP
Regarding the letter Zhongli incident, Yuan Hongbing, a jurist in Australia who is familiar with the political and business insider of the Chinese Communist Party, told The Epoch Times that such enterprises in China are the result of the combination of power and capital. Large private entrepreneurs are all based on official power. Wang Chaoyong’s backing background is known to be “mainly Zhu Rongji’s son (Zhu Yunlai) and Chen Yun’s son Chen Yuan”.
Zhu Yunlai, the eldest son of former Chinese Prime Minister Zhu Rongji, was an investment consultant and senior vice president of Credit Suisse First Boston. Later, he returned to Hong Kong and joined the Hong Kong branch of China International Capital Corporation, where Wang Qishan was the chairman. In 2000, Zhu Yunlai joined the management committee of CICC. In 2004, he became the CEO of CICC. In 2014, he resigned from the position of President and Chairman of the Management Committee of CICC.
Chen Yuan, the son of the veteran of the Communist Party of China Chen Yun, was a member of the Standing Committee of the Beijing Municipal Party Committee, Vice Governor of the Central Bank of the Communist Party of China, Chairman of the China Development Bank and Vice Chairman of the National Committee of the Chinese People’s Political Consultative Conference. He retired in March 2018.
“He (Wang Chaoyong) backed by these two power pillars, quickly accumulated huge wealth, and could do many illegal things,” said Yuan Hongbing. In addition, behind Wang, there was Zhang, a former member of the Jiang faction. The family of Korea and Liu Yunshan.
Yuan Hongbing said that the authorities did not move Wang before and only recently carried out a purge. The reason behind it was political, not economic.
Yuan Hongbing said that the Sixth Plenary Session of the 19th Central Committee of the Communist Party of China last month was a split conference. The core issue of the struggle for political lines is: the reform and opening up designed by Deng Xiaoping and implemented by Jiang Zemin, based on the CCP’s powerful market economy, should be the basic value of the reform and opening up. Affirmation should still be denied; Xi Jinping’s return to Mao Zedong’s fundamentalism should be affirmed or denied.
He said that Xi Jinping originally wanted to deny the CCP’s powerful and powerful market economy in the resolution of the Sixth Plenary Session of the Central Committee, and publicly criticized Jiang Zemin’s governance for causing extreme corruption. However, it can be seen from the results of the meeting communiqué that Xi Jinping did not achieve his goal. And all the anti-Xi factions in the party are united under the banner of supporting Deng Xiaoping’s so-called reform and opening up.
Recently, Chinese Communist Party official Qu Qingshan published an article in the Chinese Communist Party’s “People’s Daily”, the core content of which is to regard Deng Xiaoping’s reform and opening up of the powerful market economy as a “great awakening.” But the article never mentions Xi Jinping. Yuan Hongbing said that in this context, Xi Jinping purged Wang Chaoyong.
Yuan Hongbing said that Xi Jinping’s counterattack against these anti-Xi groups will still be carried out in the name of anti-corruption and financial rectification. One of his basic strategies is to destroy the economic foundation of political opponents. Including the attack on Macau’s small gambling king Zhou Zhuohua, the attack on Xiao Jianhua, and the attack on such a series of private entrepreneurs as Jack Ma. Before the 20th National Congress of the Communist Party of China, the struggle between the two lines within the party will become increasingly fierce.
Li Hengqing: Xi Jinping mainly wants to have the final say on his own
Li Hengqing, an economist in the United States, told The Epoch Times that Wang Chaoyong’s capital has reached this scale, and he must have a certain background in accumulating wealth so quickly, as the white glove of the CCP’s powerful and powerful.
However, Li Hengqing has a different view on the Wang Chaoyong incident involving high-level power struggles. He believes that Xi Jinping’s purpose of rectifying finance is “for whom or against factions, but what is the actual core idea? It is Xi Jinping who wants to listen to me, and I have the final say.”
Li Heng said that in the past, Zhou Xiaochuan, as the governor of the central bank, mentioned that the financial system must have its own set of systems to act in accordance with economic laws and be completely independent of the political power. This is contrary to the so-called international and domestic dual-cycle strategy that Xi Jinping has now established. Now if he wants to make a big domestic cycle, what Xi Jinping hopes most is to release water from the bank, because the real estate is about to collapse. Yi Gang, the governor of the central bank, also resisted at first, wanting to follow this market economy method to make Xi Jinping have ideas. Now Yi Gang has also come out to express his stance, saying that he must unite closely around Xi’s core.
Li Hengqing said that the CCP is now solving the financial crisis by taking hostages. “For example, in the case of Wang Chaoyong, whether he is a crime or not should be a judicial issue. The CCP has been talking about the rule of law, but it can cross one country, two systems to Hong Kong to enforce the law and arrest Xiao Jianhua. I think Wang Chaoyong also has the same problem.”
He said that in order to solve China’s financial problems and get out of this crisis, the most important thing is to build a country with democracy and the rule of law. Without this foundation, China’s economy will not be good, and China’s politics will not be good. This practice of continuing the one-party dictatorship will harm China’s financial sector.
Editor in charge: Ye Ziming
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