Falling off the Richest List: who is next? – the WTO column

(soon at Chinabiz)
The annual publication of the China Top 100 Rich List, composed by Rupert Hoogewerf, was this week again one of the high lights in the Chinese media. The annual celebration of private entrepreneurs is a justified one: in ten years time they have changed the face of China.
But what was almost fully left out during the press conference and most from most of the generous Chinese media coverage is the dodgy side of the rich. Every year saw at least one top-entrepreneur, often greatly supported by different local government, fall down from the list into oblivion, and sometimes into jail.

The two Tang brothers of D’Long are currently helping the authorities to find out how their assets, estimated by Hoogewerf last year on US$2.6 billion, could evaporate without almost a trace. “They fell victim to overexpansion and broken cashflows, fuelled in part by the efore-mentioned austerity measure,” is all what the press release of the Euromoney China Rich List says about D’Long. They fit into a fine tradition with illustrious names like Yang Bin, Zhou Zhengyi that were first pampered, and then dumped from local protection.
All four of them were able to fascinate relative outsiders, especially those in Hong Kong, that for rather unclear reasons thought they were a good bet. In all those cases alarm mechanisms did not work or only when it was too late. They even became part the elite of the top-100 richest Chinese.

Have the media failed? Partly I think. Nasty rumors and uncontrollable stories we heard abundant about all of them, but it was mostly hard to get them confirmed. D’Long has been very effective in keeping investigators outdoors. Checking on the nasty stories was initially hard, they were not that big yet, and so many of us gave up. In China there is still a premium on non-disclosure.
But Yang Bin was exactly the opposite. He used the media to build up his sand castle and sold effectively his ludicrous idea of building greenhouses in freezing Shenyang. I have seen many flower experts passing by in the media, but still he was celebrated as Mr. Big.

Who is going to be the next one on your 2004 list, I wanted to ask Hoogewerf, although I knew I would talk nicely around my question. All four men illustrate the risk, sometimes high risk of doing business in China. Today China has three people who have more than one billion US dollar in assets, making also the stakes higher than in the past.
Also the current number one retailer Huang Guangyu of Eagle investments shies away from the media. “We prefer to keep a low profile,” says one of his aids to Bloomberg. “That’s all we can say at this moment.” That should be a bad sign.

Fons Tuinstra