Bo Xilai Clan Links Included Citigroup Hiring of Elder Son
Stock Chart for Citigroup Inc (C)
Among the Citigroup Inc. (C) bankers gathered in Hong Kong on Aug. 11, 2006, with the mayor of the northeastern Chinese city of Tieling to discuss investments in an industrial park was the son of a powerful China princeling.
Li Wangzhi, who had joined Citigroup after earning a master’s degree at Columbia University, was the first son of Bo Xilai, according to two schoolmates of Li and repeated on an online publication affiliated with the Ministry of Culture. Extended family members of Bo, then commerce minister and now ousted Chongqing Communist Party boss, have also had positions in such firms as alternative-energy company China Everbright International Ltd. (257), according to data compiled by Bloomberg.
While the accumulation of influence is commonplace among relatives of politicians worldwide, the Bo family fortune of at least $136 million may fuel perceptions of corruption in the Communist Party and deepen social tensions over China’s widening wealth gap. The party has sought to cordon off from politics the investigations of Bo and his second wife, arrested on suspicion of murder, with an official commentary stating that the inquiry is solely a matter of law.
“The danger for them, the Chinese, is that the whole of the Politburo and their Central Committee colleagues will be exposed as a new property-owning class,” said Roderick MacFarquhar, a Harvard University professor who focuses on Chinese politics. “It’s already got out of hand. The problem for the regime is that it is now out in the public sphere.”
Bo Xilai’s relatives built their assets in a nation where per-capita income ranks 121st out of 215 countries, according to the World Bank. They set up offshore companies and used multiple names, making it more difficult to track their titles and business dealings. Companies in Dalian and Chongqing, where Bo Xilai held office, were among the beneficiaries of their investments, corporate filings in Hong Kong and the U.S. show.
Li Wangzhi, 34, is the son of Bo Xilai by Li Danyu, Bo’s wife from a marriage that ended in divorce. Bo’s son with second wife Gu Kailai, named Bo Guagua, 24, studies at Harvard University in Cambridge, Massachusetts. Two of Gu Kailai’s four sisters had at least a combined $126 million in disclosed share holdings and proceeds from real-estate investments, Bloomberg News reported on April 14.
China sent a task force to investigate claims Bo and his family hold assets in Hong Kong, the South China Morning Post said, citing unidentified sources. The Financial Times reported separately that Bo ally Zhou Yongkang, a member of the Communist Party’s top body, is being probed over disciplinary violations.
The website of Tieling, a city in China’s rust belt, shows Bo’s elder son to be one of the attendees at the 2006 meeting. He was registered with Hong Kong’s Securities and Futures Commission as an employee of Citigroup Global Markets Asia Ltd. in 2005 and 2006. Richard Tesvich, a spokesman for Citigroup in Hong Kong, declined to comment.
Tieling served as a jumping-off point for another of Bo Xilai’s entourage, now also fallen from power: Wang Lijun. In 2008, Wang followed Bo Xilai to Chongqing, where as the top cop for an urban region of 29 million he won plaudits for his crackdown on crime.
Wang is now under investigation following his flight in February to the U.S. consulate in Chengdu, which set off the chain of events that led to Bo’s downfall and Gu Kailai’s arrest on suspicion in the murder of U.K. businessman Neil Heywood.
The Bo clan’s wealth contrasts with his modest official remuneration. As the Communist Party boss of Chongqing, he rated a salary of about 10,000 yuan ($1,585) a month, according to a report on the website of the Communist Party’s official People’s Daily newspaper. The son of one of the original revolutionaries who founded Communist China, Bo is one of the so-called princeling class.
Chinese legislators have amassed outsized assets, with the wealth of the richest 70 members of the National People’s Congress amounting to $90 billion last year, 12 times the combined wealth of the 660 top officials in the U.S. government, Bloomberg News reported Feb. 27.
In Bo’s clan, elder son Li and Bo Xilai’s elder brother, Bo Xiyong, a vice chairman at China Everbright, helped manage companies with offshore registrations from Mauritius in the Indian Ocean to the British Virgin Islands in the Caribbean. Bo Xiyong also goes by the name Li Xueming.
Li Wangzhi graduated from Columbia’s School of International and Public Affairs in New York in 2003 with a master’s degree in international affairs, according to school records. He has also used the names Brendan Li, which appears in a filing with the U.S. Securities and Exchange Commission, and Li Xiaobai, which is on a posting on a Peking University- affiliated website.
Tang Baiqiao, 44, a classmate of Li Wangzhi’s at Columbia, said Li told him he was the son of Bo Xilai. Having such a powerful official as a father opened doors for Li, even as he seemed to dislike his parent, Tang said in an interview at his office in Flushing in the Queens borough of New York.
Tang, president of the Democracy Academy of China, which promotes human rights, also identified a photograph on the website of the Entrepreneur Club of Peking University as that of Li Wangzhi. The accompanying profile has the name Li Xiaobai. The biography, in Chinese, matches publicly available details about Li, including his work at Citigroup.
Du Hongjiang, who attended Peking University at the same time as Li, also confirmed in a phone call that Li was Bo Xilai’s son. Like Li, Du is a member of the Entrepreneur Club of Peking University, an exclusive association that includes Robin Li, chief executive officer of search engine Baidu Inc. (BIDU) and billionaire Huang Nubo.
From Columbia, Li started a career in private-equity investing that focused on companies based in Dalian. His father was mayor of the northeastern port city from 1993 to 2000, according to Bo Xilai’s official biography on the Xinhua News Agency.
A Brendan Li is listed as managing director for a Mauritius-registered company, Laoniu Investment Limited Co., according to U.S. Securities and Exchange Commission records. Li Wangzhi set up the Laoniu Fund, according to the Entrepreneur Club website. Laoniu Investment is an arm of the fund.
In a reference to Li’s parents, a Macquarie Capital Securities Limited report from July 2011 says: “Their son, Li Wangzhi (Brandon Li), is a graduate of Columbia University in New York and currently pursues a business career in Beijing and Dalian.”
SEC records from 2010 show that Laoniu Investment was part of a group of more than 10 entities that in 2007 bought a 15.6 percent share of HiSoft Technology International Ltd. (HSFT), a Nasdaq- listed information technology company based in Dalian.
Li is also linked to Chong’er Investment and Consultancy Co. by office and e-mail addresses. Chong’er was a Chinese prince in the seventh century B.C. who fled his home in the ancient state of Jin, modern-day Shanxi province and the ancestral home of the Bo, Li and Gu families, because his father made his half-brother the crown prince. Chong’er eventually fought back and took the crown.
Chong’er Investment shared an address with Laoniu, though a visit showed the companies no longer occupy the offices in western Beijing listed in SEC filings. Chong’er has a second address, appearing on job recruiting websites, that matches that of Hacheers Fund, of which Li is a partner, according to his profile page on the Entrepreneur Club website. The website of the Peking University Career Center provides a Chong’er e-mail account for Hacheers job applicants.
Family tensions may again be signaled in Li Wangzhi’s use of the name Li Xiaobai on the Entrepreneur Club site. The moniker uses the same Chinese characters as the name of another seventh-century B.C. prince who successfully fought his brother to succeed their father.
Li in July 2008 formed a Hong Kong company, Laoniu Xuelong Holdings Ltd, and was listed in Hong Kong company records as a director along with Fumio Higashi, president of Daito Kaiun Sangyo Co., a Kagoshima, Japan-based shipping company. The owners were Higashi and a Tortola, British Virgin Islands-based company using the Chinese name Yue Yi (BVI) Ltd., Hong Kong company filings show.
That year Laoniu invested an undisclosed amount in another Dalian company, Dalian Xuelong Industrial Group Co. Daito lists Xuelong as its representative in Dalian. Daito ships “stress- free” black cattle bred by Dalian Xuelong, which, according to Daito’s website, are massaged while listening to classical music.
Li wasn’t available when telephoned at law firm Beijing Zhongjing, where legal directories list him as a partner. No one was at home when a reporter visited a Beijing residence listed for Li in Hong Kong company filings. A mobile phone number given to Bloomberg by a former business associate reached a phone that was turned off over three days. Li didn’t respond to an e-mail message sent to an address on the Entrepreneur Club website.
Like Li Wangzhi, Bo Xilai’s oldest brother, Li Xueming, 64, has used an alternative name.
His biography on the website of the Chinese People’s Political Consultative Conference, an advisory body to China’s legislature, shows a balding man with eyes similar to those of his younger, more famous, sibling.
The same bald man was identified in photos and a July 2010 online video on the official website of Zhangye City in western China’s Gansu province as Bo Xiyong, deputy general manager of parent company China Everbright Group.
Everbright International spokeswoman Olivia Wang said the company was looking into Li’s identity.
Bo Xiyong is the oldest son of Bo Yibo, a former vice premier of China who died in 2007. The family patriarch was one of the so-called eight immortals who helped steer China after the 1966-1976 Cultural Revolution.
In 2010 and 2011, Li Xueming sold 12 million shares in China Everbright International, cashing out HK$43.2 million ($5.6 million), according to Hong Kong Exchange filings. That left options to sell 10 million shares, according to the company’s latest annual report, valued at HK$36.9 million.
Singapore and Hong Kong corporate filings reviewed by Bloomberg News show shared addresses, shareholders and directors in both cities, as well as the British Virgin Islands and Beijing, that indicate Bo Xiyong and Li Xueming are the same person.
Li Xueming was a director of HKC Holdings Ltd. (190), a Hong Kong-based property developer and investor, from March 1999 to June 2011, according to the company’s annual reports. The company’s 2010 annual report shows it owns properties across China, from Tianjin in the north to Chongqing, which Bo Xilai led until last month, in the southwest.
At HKC, Li Xueming received a HK$100,000 annual stipend, according to the company’s 2010 annual report. He had no major role in the company and did not have any shares, said Sam Wong, a senior vice president, in a telephone interview.
“I’ve never seen him at board meetings” over the last five years, Wong said. “The reason he was here was because China Everbright owned HKC a long time ago, and they wanted him to be a director.”
Bo Xilai also has two younger brothers, Bo Xicheng and Bo Xining, according to a journal of Communist Party history. Bo Xicheng is chairman of Beijing Liuhexing Hotel Management Co. and former chief of the Beijing Municipal Bureau of Tourism, according to a transcript of an online interview Bo Xicheng had with the official People’s Daily website in 2007.
Bo Xicheng also served as an independent director of Citic Securities Co. (600030), a Beijing-based brokerage, from July 2003 to May 2006, according to the company’s 2006 annual report.
Bo Xicheng’s office in Beijing is accessible only through a small parking garage. A woman who opened the steel door a crack said Bo wasn’t there, before closing it quickly.
To contact Bloomberg News staff for this story: Michael Forsythe in Beijing at email@example.com; Wenxin Fan in Shanghai at firstname.lastname@example.org; Dune Lawrence in New York at email@example.com; Vinicy Chan in Hong Kong at firstname.lastname@example.org; Natasha Khan in Hong Kong at email@example.com; Yidi Zhao in Beijing at firstname.lastname@example.org; Ben Richardson in Hong Kong at email@example.com
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.