Even by the standards of China’s rough and tumble breed of entrepreneurs, billionaire Liu Han’s brushes with death mark him out.
After dodging a hitman’s bullets in 1997, which led to the execution of a rival tycoon and two of his relatives almost a decade later, Liu, 47, finds himself ensnared in more killings. This time, his own brother is the suspect, and the Sichuan Hanlong Group founder is being held by police for helping him evade capture over a 2009 triple murder, state media reported.
The arrest throws into jeopardy Hanlong’s planned mining investments, casting doubt on the future of Sundance Resources Ltd.’s $4.7 billion iron-ore project in West Africa and General Moly Inc.’s Mt. Hope, Nevada, molybdenum mine. His detention still hasn’t been confirmed by authorities and there has been no official indication of who is now running Liu’s empire, which spans energy, real estate, chemicals and technology.
Liu’s rise to riches and sudden disappearance aren’t just the makings of a made-for-Hollywood potboiler. They’re a warning of the risks investors take when dealing with opaque private businesses in China, where fortunes depend on political ties and the favors of state entities, and even the wealthiest entrepreneurs can vanish if they lose the patronage of powerful government allies.
Investors “have to be clear about what kind of person they are dealing with, what is their background, and what is their political relationship with the current system,” said Ronald Wan, chair professor at Renmin University of China. “There are different camps, different interest groups.”
According to a March 20 report in Shanghai Securities News that cited unidentified people familiar with the matter, Liu and his ex-wife were detained in Beijing at the end of the annual meeting of China’s legislature. At that meeting, Xi Jinping took over as president and Li Keqiang as premier with a pledge to fight corruption and abuses of power.
The case may be “politically well-timed” to show their determination and signal that even the rich aren’t immune, said Willy Wo-lap Lam, an adjunct history professor at Chinese University of Hong Kong.
The once-in-a-decade transition of power was roiled by the purge and detention of Bo Xilai on suspicion of graft and involvement in the murder of a British businessmen. The ouster was made more shocking because of Bo’s pedigree: a member of the ruling Politburo, governor of Chongqing municipality and son of one of China’s founding revolutionaries, Bo Yibo.