On the trail of Bo Xilai 2: Beyond China and Hong Kong

Page from a Hong Kong corporate filing shows that Hitoro Holdings, in which Gu Kailai’s sister is a director, is mostly owned by a British Virgin Islands company called Informatic Resources Limited.

Like many members of the Communist Party elite, recently purged Politburo member Bo Xilai and his family members did business in Hong Kong and the West, making it easier for journalists to find a document trail. Bo’s wife Gu Kailai, a high-powered lawyer, practiced in the U.S. and lived in the U.K. for some time. The couple also sent their son to a posh boarding school in England then on to Oxford and later Harvard, where he is currently in graduate school.

Last November, the son, Bo Guagua, provided Exhibit A for a Wall Street Journal essay on China’s princelings. The article opened with a bright red Ferrari the young Bo was supposedly driving around while in Beijing. As the piece said cheekily, he “was driving a car worth hundreds of thousands of dollars and as red as the Chinese flag, in a country where the average household income last year was about $3,300.”

“Top Chinese leaders,” it continued, “aren’t supposed to have either inherited wealth or business careers to supplement their modest salaries, thought to be around 140,000 yuan ($22,000) a year for a minister. Their relatives are allowed to conduct business as long as they don’t profit from their political connections. In practice, the origins of the families’ riches are often impossible to trace.”

Well, not quite. Because corporate and property records in many countries are now available online, it’s become so much easier for journalists to trace business dealings linked to crime or corruption across borders. The previous post explained how, in February, Hong Kong reporters were able to find evidence of some of the Bo family’s business dealings in both China and Hong Kong.

Since then, major U.S. publications have followed the family’s trail in the U.S., the United Kingdom and Caribbean offshore havens.They mined information from corporate registries, stock exchange filings as well as property records databases. They also pierced though the multiple names and aliases used by various family members.

Following on Hong Kong-based Next Magazine’s reporting, Bloomberg did a deep dive into corporate filings. In an April 13 story, it reported that two of Gu Kailai’s sisters are directors of several companies in Hong Kong and China. One sister, Gu Wangjiang, is director of Hong Kong-registered Hitoro Holdings, which owns a third – about $114 million worth of shares – of a Shenzen-listed company of which she is chairman.

Bloomberg went farther, and found that the paper trail led to offshore havens. Hitoro’s controlling shareholder is Infomatic Resources Ltd., registered in the British Virgin Islands, according to Hong Kong corporate filings (a page from the company’s annual return is in the photo above. The document was downloaded from ICRIS, the Hong Kong corporate registry; the full annual return is here.). In addition, Gu Wangjiang, known in Hong Kong as Kuk Mong Kong, was also a director of the Panama-registered Sitoro Shipping Enterprises Co. and of a venture with Malaysian billionaire Vincent Tan’s Berjaya Group Bhd, said Bloomberg, citing Hong Kong corporate records.

Bloomberg also discovered that through Hitoro, Gu made millions selling a luxury apartment that Hong Kong property records show was purchased last year for HK$88 million (roughly US$11.4million). Hitoro had bought the property for just $1.2 million in 1992. (Hong Kong property records can be searched on IRIS, a database maintained by the Land Registry.)

Earlier, the Wall Street Journal had found that Gu Kailai herself had also registered a company in the U.K. – but under a different name.

The U.K.’s Companies House makes it relatively easy to find information on both public and private companies, unlike in the U.S., where information on private companies is scant. One can type in a company name in the Companies House website and download PDFs of the company’s filings for ₤1 each.

Companies House only allows searches by company name or registration number,but the website duedil.com enables searches by director name. But there was no director listing for Gu Kailai. That’s because, according to the Journal, she registered a company under an assumed name, Horus Kai, which she also used when she was lawyering for Chinese companies in the U.S. in the 1990s.

A search of Horus Kai yielded a company named Adad Ltd. The Companies House online database contains a PDF of Adad’s Form 363, the annual return U.K. companies are required to file. That form includes director’s names, dates of birth and occupation.

Excerpt from Adad Ltd’s Form 363 that shows the name of Horus Kai, her address, date of birth, nationality and occupation.

It was based on this information that the Journal was able to report:

British public records show that in 2000 a Chinese lawyer using the name Horus Kai became a director of a company called Adad Ltd., based in the southern seaside town of Poole. Adad was dissolved in 2003.

One public document has a signature for Horus Kai in Chinese, which is barely legible, but appears to include the final two characters of Ms. Gu’s real name, Kailai. That document gives a date of birth of Nov. 15, 1958—the same as that given for Ms. Gu on the Beijing justice department website—and a residential address in the nearby city of Bournemouth.

While corporate records clinched these stories, they would not have been possible without human sources who provided the names that made document searches possible. The Wall Street Journal’s vigilant reporting on Bo Xilai since last year put them ahead of the game. They found a Denver lawyer with whom Gu Kailai worked when she was hired to represent Chinese companies involved in lawsuits in the U.S. 15 years ago. It was this lawyer who revealed she used a different name then; he also provided colorful details on the glamorous Gu:

The Journal’s excellent profile of Gu relied on both public records and interviews that brought out revealing, and previously unpublished information. It began:

The wife of sacked Communist Party official Bo Xilai made quite an impression when she showed up in Mobile, Ala., 15 years ago with her young son in tow. Denver lawyer Ed Byrne, whom she had hired to represent Chinese companies embroiled in a legal mess in U.S. federal court, was struck by her brains, charm and beauty. Gu Kailai, he says, seemed like the “Jackie Kennedy of China.”

Gu Kailai was close to a British businessman who died mysteriously.The business cards she distributed carried the name Horus L. Kai—a name she used in various business dealings over the years in the U.S. and U.K. A practicing lawyer in China, she helped chart the winning legal strategy, Mr. Byrne says. When the case was over, she invited her legal team back to China to entertain them in the port city of Dalian along with her husband, who was mayor there.

One Comment on “On the trail of Bo Xilai 2: Beyond China and Hong Kong”

  1. […] In her two-part blog entry, Coronel showed a feisty Hong Kong-based Next Magazine led the way and broke the ground by sniffing Bo’s corruption trail. Next Magazine’s lead was followed by bigger media groups, with agencies  such as the Wall Street Journal, the New York Times, and Bloomberg “trolling public records databases around the world to piece together information about the couple, information that in the pre-digital days would have been difficult to find.” […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s