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In the recent years, it has been a well known fact that China govt & CCP members are "buying up" lucrative private businesses into state ownership - a move that Russia did in the 1990s. Here is a story of one entrepreneur.
Matthew Ng 'may be a victim of murky party ploy'
Michael Sainsbury, Mark Dodd From: The Australian December 04, 2010 12:00AM
CHINA wants the bulk of Australian businessman Matthew Ng's firm Et-China brought into government ownership for a stockmarket listing.
Such a listing promises a pay-day bonanza for Communist Party officials.
The detained businessman was charged this week with embezzlement following a dispute with state-owned Guangzhou Lingnan (GZL), a subsidiary of Lingnan, whose assets he bought control of in 2007.
Et-China controls 53 per cent of GZL, which makes up 97 per cent of its business.
Mr Ng faces possible life imprisonment but is even liable for the death penalty, although that is now rarely used in such cases.
Plans by Guangzhou's state-owned Assets Supervision and Administration Commission to list Lingnan on the stockmarket points to the charges for Mr Ng being signed off at the highest levels of the city's governing apparatus.
This raises a fresh problem for the Australian government if the Guangzhou government is seen to be directly responsible for Mr Ng's plight.
Guangdong-born Mr Ng, an Australian citizen, could be the victim of a murky acquisitions ploy involving local party officials, a leading global intelligence company said yesterday.
The majority stake purchase of GZL -- a Guangdong provincial state-owned enterprise -- was negotiated through its general manager Zheng Hong, a long-serving Communist Party official and local party secretary who was detained shortly after the August 20 buyout, Stratfor said in a report, seen by The Weekend Australian.
What Mr Zheng was detained for and what led to the investigation are still mysteries known only to Guangdong party officials.
What is known is that, under shuanggui (house arrest), party members are encouraged to admit their wrongdoing, and Mr Zheng may have implicated Mr Ng in confessing his crimes, the report said.
"One reason for Ng's arrest -- and the one supported by Ng's defenders -- is the power of provincial SOEs (state-owned enterprises) to interfere with Ng's business deals for their own profit.
"GZL had become extremely profitable, and as an SOE executive, Zheng probably did not think he was compensated enough for the company's success (low wages are one reason for the high levels of bribery and corruption in China)," Stratfor said.
Negotiations for the sale of 50.6 per cent of GZL to Et-China began in 2006, when Mr Zheng was 59 years old, a year before the required Communist Party retirement age. It may have been a way to enrich himself and other GZL executives, it added.
The Department of Foreign Affairs and Trade said it was closely monitoring the case to ensure due legal process was followed.
Unlike with Rio Tinto mining executive Stern Hu, jailed this year for bribery and theft of commercial secrets, Beijing has not become involved in Mr Ng's case.
The opposition said the government should ensure the Chinese stick to the terms of a signed consular agreement.
Matthew Ng 'may be a victim of murky party ploy'
Michael Sainsbury, Mark Dodd From: The Australian December 04, 2010 12:00AM
CHINA wants the bulk of Australian businessman Matthew Ng's firm Et-China brought into government ownership for a stockmarket listing.
Such a listing promises a pay-day bonanza for Communist Party officials.
The detained businessman was charged this week with embezzlement following a dispute with state-owned Guangzhou Lingnan (GZL), a subsidiary of Lingnan, whose assets he bought control of in 2007.
Et-China controls 53 per cent of GZL, which makes up 97 per cent of its business.
Mr Ng faces possible life imprisonment but is even liable for the death penalty, although that is now rarely used in such cases.
Plans by Guangzhou's state-owned Assets Supervision and Administration Commission to list Lingnan on the stockmarket points to the charges for Mr Ng being signed off at the highest levels of the city's governing apparatus.
This raises a fresh problem for the Australian government if the Guangzhou government is seen to be directly responsible for Mr Ng's plight.
Guangdong-born Mr Ng, an Australian citizen, could be the victim of a murky acquisitions ploy involving local party officials, a leading global intelligence company said yesterday.
The majority stake purchase of GZL -- a Guangdong provincial state-owned enterprise -- was negotiated through its general manager Zheng Hong, a long-serving Communist Party official and local party secretary who was detained shortly after the August 20 buyout, Stratfor said in a report, seen by The Weekend Australian.
What Mr Zheng was detained for and what led to the investigation are still mysteries known only to Guangdong party officials.
What is known is that, under shuanggui (house arrest), party members are encouraged to admit their wrongdoing, and Mr Zheng may have implicated Mr Ng in confessing his crimes, the report said.
"One reason for Ng's arrest -- and the one supported by Ng's defenders -- is the power of provincial SOEs (state-owned enterprises) to interfere with Ng's business deals for their own profit.
"GZL had become extremely profitable, and as an SOE executive, Zheng probably did not think he was compensated enough for the company's success (low wages are one reason for the high levels of bribery and corruption in China)," Stratfor said.
Negotiations for the sale of 50.6 per cent of GZL to Et-China began in 2006, when Mr Zheng was 59 years old, a year before the required Communist Party retirement age. It may have been a way to enrich himself and other GZL executives, it added.
The Department of Foreign Affairs and Trade said it was closely monitoring the case to ensure due legal process was followed.
Unlike with Rio Tinto mining executive Stern Hu, jailed this year for bribery and theft of commercial secrets, Beijing has not become involved in Mr Ng's case.
The opposition said the government should ensure the Chinese stick to the terms of a signed consular agreement.
