Paradise Papers Reveal Son-in-Law of Former Bank of China Governor with Murky Stock Dealings
Frank Fang, 14 Nov 17
       

Dai Xianglong, Chairman of China's National Council of Social Security Fund, speaks during the International Finance Forum (IFF) 2011 Annual Conference at China World Trade Center Tower 3 on Nov. 9, 2011 in Beijing. (VCG/VCG via Getty Images)

This is version 2.0 of the Panama Papers. The International Consortium of Investigative Journalists (ICIJ) has published findings from another batch of leaked documents, called the Paradise Papers, showing how the richest in Europe, North and South America, Asia, Africa, and the Middle East have used offshore accounts to hide their wealth or shift their money around in secrecy—activities that are considered legal, but are a slap in the face for their respective countries’ taxation systems.

In China, the Paradise Papers revealed that Che Feng (车峰), son-in-law of Dai Xianglong (戴相龙), the former governor of the People’s Bank of China, had, through a complicated set of transactions, ended up with 114 million HKD (about $14.6 million) in preferred stocks through his offshore company registered in the British Virgin Islands, between 2009 and 2013.

Hong Kong newspaper HK01 published the report on Che, as one of 100 media companies that have partnered with ICIJ in the investigation.

Che’s stock dealings were traced to the Charoen Pokphand Group, a Thai conglomerate located in Bangkok and run by Dhanin Chearavanont, CEO and chairman of the company and its subsidiary C.P. Pokphand, which is listed on the Hong Kong Stock Exchange.

In December 2009, C.P. Pokphand bought a portion of assets under Orient Success International Limited (OSIL), also a subsidiary of the Charoen Pokphand Group, by offering up to 6.62 billion preferred stocks at the price of 0.3255 HKD per stock ($0.04). The price was a 40 percent discount since the stock price that day was 0.62 HKD per stock ($0.08).

About 190 million shares of those preferred stocks were later transferred to Ever Union Capital Limited, a company registered in the British Virgin Islands on July 22, 2010, according to the Paradise Papers, even though the stock price for which they got sold off was never publicly disclosed. Then on July 28, 2010, these transferred shares were converted to common stocks at the price of 0.6 HKD per stock ($0.08).

In other words, Che had come in possession of stocks that were worth 114 million HKD.

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