[Assam] The most corrupt man in China
bbaruah at aol.com
bbaruah at aol.com
Sun Jul 1 02:03:53 EDT 2007
I cannot but share this interesting read with you from today's The Sunday Times.
>From The Sunday Times
July 1, 2007
The most corrupt man in China
When super-rich tycoon Lai Changxing went down he took 10,000 officials with him. This is his extraordinary story
For every glass tower newly built in the boom towns of southern China, there is a construction project that’s failed or run out of money. When it rains, water pours into thousands of craters lining the roads like fresh graves, none bigger than the one dug by Lai Chang-xing in the city of Xiamen.
Lai’s tower would have had 88 floors, higher than any in China, and all that’s left now is a waterlogged pit, albeit one fit for a sports arena. Neighbours still remember the lavish ground-breaking ceremony Lai held here. Two thousand guests were handed red envelopes filled with $375 (£187) each as they walked in – a welcome gift – and then served abalone, a rare shellfish that sells for up to $800 a portion.
An illiterate peasant who became one of China’s richest men during the 1990s, Lai was also one of its most corrupt, reaching the top of Beijing’s most wanted list. For years, he entertained government ministers at a seven-storey villa called the Red Mansion, housing 100 modern-day concubines. For larger parties, he built a replica of the Forbidden City, the citadel of China’s emperors.
Lai was China’s biggest private trader of cars and cigarettes, and the importer of a sixth of its oil. He thought he knew how to enjoy wealth without turning it into a curse, and how to game the officials who still ruled the economy. The key was bribery, he believed, and the key to bribery was sex.
With the help of friendly officials, Lai cheated Beijing out of $3.6 billion in taxes, and then fled the country as he became the focus of the largest criminal investigation in Chinese history. Ten thousand of his associates were detained and 1,000 imprisoned. Fourteen were sentenced to death, among them the minister for borders and the head of military intelligence. Lai’s older brother and his accountant died in prison. Only Lai got away.
As a founding member of China’s newly minted class of oligarchs, Lai’s wealth gave him unheard-of powers in this nominally still Communist country (where more than a third of all Bentleys are now sold, and half the world’s cement is consumed). Lai succeeded where others failed because he understood the fundamentally haphazard nature of a land perched between total command and a free-for-all market.
Short and tubby, Lai was born in 1958, one of eight peasant siblings who knew starvation at a young age and received almost no formal education. At 20, when the government moved towards economic liberalisa-tion, he started making car parts. The business took off. Soon officials began asking for bribes. When Lai refused, a sister was beaten hard enough to send her to the hospital, and he was tied up in legal disputes.
>From then on, Lai never refused another official. Instead, he made sure he exceeded their expectations. He took them to a private nightclub where sequined mermaids waltzed across a spotlit stage, followed by rouged Red Guards goose-stepping to The Sound of Music.
Later, he built his own bordello. He sent recruiters across the country to hire so-called “Miss Temporaries”. They had to be at least 5ft 6in tall and have a high school diploma. He paid them a base salary of $1,000 a month, a vast sum for most Chinese, and offered them to government officials as mistresses.
Lai named the seven-storey building where they resided after Dream of a Red Mansion, a Qing dynasty tale about a wealthy family and its courtesans. Along the corridors on the lower floors were massage rooms and movie theatres.
One guest was Li Jizhou, the minister for borders. At the mansion, he was introduced to a public relations manager from a trading firm. After Li expressed an interest in her, Lai hired her as a full-time mistress. “If you can make the minister happy you can have anything you want,” Lai told her. And she did.
The more wealth he accumulated, the more he grew in confidence. After the Red Mansion, he spent $20m building a replica of the Forbidden City among green hills half an hour’s drive from the southern Chinese coast. Visitors to this palace of supreme power were greeted by a red banner on a Gate of Heavenly Peace, quoting Mao: “Strengthening socialist spiritual civilisation is the great strategic goal”. Next to it was a portrait of the chairman, the same that has for decades hung on the original Gate of Heavenly Peace in Beijing.
Lai was ridiculing the Communist party with this mock tribute. At the centre of the palace was a lacquered pavilion with a gold-bedecked throne, next to a beer-company umbrella. It was here that Lai sat during the opening, when he crowned himself a tu huangdi, or dirt emperor, who lived in his own Ming dynasty fiefdom.
Lai had billions of dollars and didn’t know what to do with them. He spent $2m on a first-rate soccer club near Canton, disbanded it and transferred all the players to his home town. He built his parents a villa with a marble arch, and put a 30ft glass roof in the shape of a pyramid on top of the house of his eldest brother.
He gave taxi drivers $100 notes for $6 or $7 rides, and at a nearby Holiday Inn hotel he always signed a blank credit card receipt at the start of a meal and asked not to be shown the bill. He could not have read it in any case. He was barely able to decipher his own business card. To avoid embarrassment, he refused to engage in correspondence of any kind.
The result was a business empire with no organisation charts, no hierarchy other than the link every one of his employees had with him. Business plans were unheard of, memos unknown. Nonetheless, when the end came, and Lai had to run for his life, it was not this lack of orthodoxy that felled him. It was the greed of an official, and Lai’s uncharacteristic refusal to bribe him, that sealed his fate.
Zhu Niuniu was the son of a high-ranking general who regularly aided Lai’s import business, shepherding goods through customs. Zhu had a gambling problem and ended up borrowing $10m from Lai and his associates. When Zhu’s other creditors demanded their money back, he asked Lai for help. But Lai turned him down. He had been unhappy with Zhu’s frequent gambling, he told him. Fearful of the other creditors, Zhu decided on a simple solution. He would turn everyone in.
Within weeks, some 600 special investigators descended on the Red Mansion. They set out to unravel Lai’s network, telling officials they would be pardoned if they cooperated. Lai’s contacts in the government warned him about the special investigators: unseen he transferred large sums of money abroad. Then he drove to the southern coast, hired a speedboat and, avoiding all border controls, entered Hong Kong where his wife and children were waiting. A few days later, they flew to Canada.
For more than a year, Beijing searched desperately for Lai. Checkpoints were set up from Hong Kong to Shanghai. Raids were conducted and phones tapped, but Lai could not be found. The prime minister fumed: “He should be killed three times over, and even that wouldn’t be enough.”
Yet parts of the Chinese public came to idolise Lai as a latterday Robin Hood. They approvingly called him a tufei, a classical term for a bandit, meaning to elevate him above mere robbers and cheats. They said he was defying the authorities for just reasons. He was like the mythical bandit, Sung Chiang, who “helped the needy and looked lightly upon silver”.
Lai bought a home for $1m in cash in Vancouver’s exclusive South Granville district. His children went to private school and his wife opened a bank account with an initial deposit of $1.5m. Lai moved around in a chauffeur-driven $90,000 sports-utility vehicle. But he was bored. After a few months, he started visiting Canada’s casino capital Niagara Falls, and that’s where his luck finally ran out. On the 28th day of a gambling spree, he was charged by Canadian police with money-laundering. They had watched him stake millions of dollars worth of chips, and when he seemed not to mind losing, they had become suspicious.
>From a detention cell, the first he ever visited, Lai applied for political asylum. He said he had powerful enemies in China who wanted to kill him, which was undoubtedly true. But Canadian government lawyers argued that he was “the head of the largest smuggling enterprise in Chinese history” and that his were “nonpolitical crimes”.
On May 15, 2006, Lai lost an appeal and a deportation order was issued. In desperation, he crashed his forehead into metal bars in a prison van, hoping to injure himself and delay his return to China. Meanwhile, his lawyer challenged the deportation order in federal court in Ottawa. Two weeks later, less than 24 hours before Lai was to be put on a plane, the court ruled that Lai faced “cruel and unusual punishment” in China and hence should be allowed to stay. The deportation order was lifted, pending further legal challenges, and Lai was freed. Then on April 6, 2007, a federal judge ruled that it was “patently unreasonable” to accept China’s assurances not to harm Lai.
When I met him in his Vancouver penthouse, he seemed a changed man. One hand worked the belt buckle on a pair of black chinos and the other tucked in a black turtle-neck. His eyes were bloodshot and small.
“Please,” he said, gesturing towards the panoramic views of the sea and the mountains, “welcome”. His round-the-clock security guards alone cost $20,000 a week. But, still, this was a far cry from the baronial follies he owned in China. Looking out over the sparse Pacific Northwest, the 49-year-old told me he longed to be back home.
Below us, suburban Vancouver lumbered past. It was difficult to imagine Lai ever becoming part of this landscape. Still he tried. “Do you smoke?” he said, reaching into his pocket. He pulled out a red pack, a Chinese brand. “Yuanhua,” he said. “My company made these. I designed the logo myself. We sold millions.”
He turned the pack over in his hand a few times, then extended his arm. “I have only three left now. Take one.”
© Oliver August 2007
Inside the Red Mansion: On the Trail of China’s Most Wanted Man by Oliver August will be published by John Murray on July 12, £20. Copies can be ordered for £18 with free delivery/plus p&p from The Sunday Times BooksFirst on 0870 165 8585
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