April 26 (Bloomberg) -- The brother of ousted Chinese politician Bo Xilai resigned from a corporate executive post, and Bo’s son defended his lifestyle and educational expenses, amid scrutiny of the family’s wealth and influence.
Li Xueming, the brother of former Politburo member Bo Xilai, stepped down as a director and vice chairman of China Everbright International Ltd., after media reports that highlighted his personal background.
“The board has been advised by Mr. Li that he, for the best interest of the company and its shareholders as a whole, has decided to resign from the board,” China Everbright, an alternative energy company, said yesterday in a statement.
The media reports about Li’s identity emerged after Bo’s removal, which marks the biggest political upheaval in China in more than two decades. Bo’s downfall and the arrest of his wife, Gu Kailai, on suspicion of involvement in the murder of a British businessman have heightened scrutiny of the family’s business interests and influence.
Harvard student Bo Guagua, Bo Xilai’s younger son, said his education was funded by scholarships and his mother’s savings and denied ever driving a Ferrari as he sought to dispel speculation of an extravagant lifestyle supported by ill-gotten wealth. In an April 24 statement, the first public comments since his mother’s arrest, the 24-year-old said he was “deeply concerned” by the events surrounding his family.
Bo Xilai, 62, who was suspended as Chongqing Party chief last month, has been accused of “serious violations of discipline,” the Xinhua News Agency said April 10. His wife and an aide were put in custody for suspicion of murdering British businessman Neil Heywood.
The arrests came after Bo Xilai’s former police chief, Wang Lijun, had spent a night in February at the U.S. consulate in Chengdu, an event confirmed by both the U.S. and Chinese governments. Xinhua reported that Wang disclosed the murder allegations.
Most Serious Crimes
The Communist Party believed one of Bo’s most serious crimes was a wiretapping campaign that included monitoring the phones of top leaders, the New York Times reported today, citing people with party ties it did not identify. The report said Bo was accused of damaging party unity by collecting the evidence. Those monitored included President Hu Jintao, it said.
Li Xueming, 64, who also goes by the name Bo Xiyong, sold 12 million shares in China Everbright in 2010 and 2011, cashing out HK$43.2 million ($5.6 million), according to Hong Kong Exchange filings. That left him with 10 million options, according to the company’s latest annual report.
Singapore and Hong Kong corporate filings reviewed by Bloomberg News show shared addresses, shareholders and directors indicating Bo Xiyong and Li Xueming are the same.
“It is quite disgraceful that individuals are allowed to adopt different identities depending on which company or circumstance they are appearing in,” David Webb, a former director of the Hong Kong bourse, said in an April 24 interview. “Shareholders have a right to know exactly who is running their companies.”
Ernest Kong, a spokesman for the Securities and Futures Commission, the Hong Kong regulator, didn’t respond to e-mails or voicemail messages seeking comment on Li’s resignation. Shares of China Everbright International rose as much as 7.3 percent in trading on the Hong Kong stock exchange today and were up 7 percent at 1:35 p.m. The benchmark Hang Seng Index was up 0.2 percent.
Gu’s sisters controlled an international web of businesses worth at least $126 million and the family members of Bo Xilai have held positions at companies including Citigroup Inc. and Citic Securities Co., according to data compiled by Bloomberg.
Bo Guagua is a student at the Harvard Kennedy School in Cambridge, Massachusetts. In his statement, which ran yesterday in the Harvard Crimson, the university’s student newspaper, he defended his lifestyle.
“Recently, there has been increasing attention from the press on my private life,” Bo said in the statement. “As a result of these speculations, I feel responsible to the public to provide an account of the facts.”
Bo Xilai’s ouster and reports that his wife moved money abroad have focused attention on how his son’s education was funded. Along with Harvard, Bo Guagua has attended the exclusive Harrow School and Oxford University in the U.K. While Bo Xilai’s salary as Chongqing party secretary was about 10,000 yuan ($1,586) a month, his relatives have accumulated wealth of at least $136 million, according to data compiled by Bloomberg on the extended family’s business interests.
“My tuition and living expenses at Harrow School, University of Oxford and Harvard University were funded exclusively by two sources -- scholarships earned independently, and my mother’s generosity from the savings she earned from her years as a successful lawyer and writer,” Bo said. He didn’t say where the scholarships came from.
Harvard said it won’t comment on how many Chinese students receive financial aid.
He defended his academic record and social life while at Oxford University, saying he debated at the Oxford Union and was president of the Politics, Philosophy and Economics Society.
‘Broaden My Perspective’
“Like many other university students, I also devoted time and energy to extra-curricular activities,” he said. “These extra-curricular activities enabled me to broaden my perspective, serve the student community, and experience all that Oxford has to offer.”
Bo Guagua said he had never driven a Ferrari and never visited the U.S. ambassador’s residence in China, contradicting a report in the Wall Street Journal in November. Speaking March 9 in Beijing, Bo Xilai denied as “completely rubbish” reports that his son drives a red Ferrari, and said his son attended Harvard and Oxford on scholarships.
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.
China Everbright said in the statement that “recent reports by the media” on Li Xueming’s background “have no relationship with the normal business and operations of the company, and have not affected and will not affect the normal business and operations of the company and its subsidiaries.”
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