China Disappearances Highlight Ruling Party Detention System

Updated on
Fosun's Chairman Is 'Unreachable': Caixin
  • Chairman of Fosun International became `Unreachable' Thursday
  • Shuanggui system of secret detentions a key part of crackdown

The baffling disappearance of Chinese executives in recent weeks has drawn attention to the ruling Communist Party’s practice of holding people incommunicado either as targets of investigations themselves or to help with probes of others.

The most recent example came last night, when Caixin magazine reported that Guo Guangchang, the billionaire chairman of Fosun International Ltd. couldn’t be contacted. Fosun suspended its shares today and its bonds plunged by a record before the company said Guo was assisting justice authorities with a probe. Other high profile cases in recent weeks included two members of Citic Securities’ executive committee who became unreachable earlier this month, along with Yim Fung, the chief executive officer of Guotai Junan Securities Co.

The Chinese word for unreachable -- shilian, which means “lost contact” -- has become a euphemism in China for the party holding executives and officials for questioning or arrest, often indefinitely and at an undisclosed location. That practice has long been criticized by human rights activists who say the lack of transparency and accountability opens the door to abuses such as torture.

Corruption Campaign

The detentions, known as “shuanggui” if the party detains one of its members and “shuangzhi” if a non-party member is held as part of a probe, has featured prominently in President Xi Jinping’s campaign to root out corruption that he says is now rife in the ranks of the party’s more than 87 million members. People can be detained even if they are not the target of a probe themselves.

Sohu.com reported today that Guo was helping with a corruption investigation into former Shanghai vice mayor Ai Baojun. Fosun didn’t specify the subject of the probe, other than to say Guo will be able to participate in the company’s decisions on “substantial issues.”

The Central Commission for Discipline Inspection, the agency leading the anti-corruption campaign, didn’t respond to a fax seeking comment.

The main problem with the practice is that it isn’t transparent, said Zhu Lijia, a professor of public policy at the Chinese Academy of Governance. “Nobody really knows what happens inside the room, and that’s dangerous without regulations,” Zhu said.

Forced Confessions

Some officials who were later convicted in courts of law have spoken out about their experience in party detention. Bo Xilai, a senior party official who is serving life behind bars for bribery, said during his trial that he was forced to make confessions during interrogations. Liu Han, who was executed this year for crimes including murder, said in court last year that he’d been tortured and beaten by investigators to force him to confess.

In 2013, a Chinese court sentenced five investigators with the party’s anti-corruption watchdog, the CCDI, to prison terms over the death of a company executive who died in their custody. An official with the Zhejiang prosecutor’s office was also sentenced.

Sometimes, the people detained are quietly released without charges. Lei Jie, the former chairman of Founder Securities Co. and its joint venture with Credit Suisse Group AG, was released a few months ago from police custody after going missing in January, a person with knowledge of the matter said in November. Jie’s release came after he assisted with a government probe, said the person, who asked not to be identified because there was no formal announcement of the move.

‘Short Vacation’

Li Yifei, chairwoman of hedge fund Man Group’s China unit, was taken into custody to help with an investigation into market volatility, a person familiar with the matter said in August. Li later told Bloomberg she was back from a “series of meetings” and a short vacation, denying the report she had assisted a police probe into market volatility.

Xi’s anti-corruption campaign has increasingly focused on the finance industry and related companies in an expanding government crackdown following a $5 trillion summer stock market rout. Senior officials at some of the country’s top brokerages have been investigated for alleged insider trading and stock manipulation as China intensifies probes into strategies authorities suspect may have exacerbated the selloff that started in June. 

“It could take a while for the inspectors to inform the company or the family members if a person is under party’s custody, and normally during that period the company can only say the person is not reachable,” said Zhu Lijia, a professor of public policy at the Chinese Academy of Governance. “That’s because the disciplinary apparatus fears if they inform others, the company or family members would destroy evidence, or transfer illicit assets.”

Fosun International’s business operations “remain normal,” spokesperson Chen Bo said today in a text message. Its shares will reopen on Dec. 14, the company said late tonight.

— With assistance by Keith Zhai

Before it's here, it's on the Bloomberg Terminal. LEARN MORE