Wong Choihing built Hydoo International Holding into one of China’s fastest growing developers of logistics real estate through entrepreneurial zeal and close ties to the party. Now the billionaire businessman’s ability to use official relationships to build his company appear to have lost him his freedom, as the chairman of the Hong Kong-listed company has not been seen since early July, and is now said to be “cooperating with relevant government departments in an investigation.”
While no details have been publicly announced, the Jiangxi real estate tycoon and member of the National Committee of China’s communist party, appears to be another casualty of Xi Jinping’s campaign to stamp out corruption.
Hydoo Separates Itself from Wong
Today, Hydoo’s board announced that Wong has been dismissed from his position with the company, and replaced as chairman by his younger brother, Wang Jianli. The move came just over one month after Hydoo had first reported Wong’s disappearance on July 23rd. On July 24th, Hydoo’s shares dropped to HK$1.55 per share, after trading as high as HK$2.95 per share on June 17th.
The company took care to stress that existing projects and key contracts have not suffered any disruption or adverse effects due to the involuntary change in leadership. The stock closed today at HK$2.12 per share.
From Family Business to Listed Company in Three Years
The company that is now known as Hydoo, was founded more than 18 years ago as a family company, before being re-incorporated in 2010 under the new name. The company has grown to scale at remarkable speed to where it built 19 trading centres in seven provinces or autonomous regions across China by 2010, and currently has a land bank said by Hydoo to total eight million square metres.
Thanks to its rapid growth, Hydoo was able to list publicly on the Hong Kong exchange in October last year. In the process, the builder of wholesale trade and logistics centres raised over $200 million, while the family still retained approximately 60 percent of the company.
Among the developer’s investors as of the end of April were such global heavyweights as Hony Capital (which owns more than 14 percent), UBS, Baring Asset Management, HSBC Global Asset Management, and Nomura Asset Management.
A Party Leader and Successful Entrepreneur
Just as impressive as the company’s track record was Wong’s own story of rising from humble beginnings to being a party leader and successful entrepreneur.
According to an account by China-based investment banker Peter Fuhrman who invested in the company pre-IPO, Wong started life as a long distance truck driver, and built the company together with his nine brothers and sisters, as well as other family members. Earlier this year the shares held by this extended family were worth more than $1 billion US.
While building his company, Wong also built an impressive position within the Communist Party.
According to local news reports the former truck driver went on to be included as a member of the 12th National Committee of the Chinese People’s Political Consultative Conference, a member of the All-China Federation Of Industry & Commerce for Jiangxi, a member of the Jiangxi Standing Committee of the Chinese People’s Political Consultative Conference, and Vice President of Jiangxi Provincial Federation.
Press reports have noted the prominent position given to photos of Wong with high level government leaders at Hydoo’s offices.
More Leaders Felled By Real Estate Dealings
While no specifics have been released regarding charges against Wong, his detention fits a pattern of officials and businesspeople being detained for corrupt dealings as part of the Xi administration’s anti-corruption campaign.
When Guangzhou Party Secretary Wan Qingliang was detained for alleged misdeeds in July, several of his cronies from both government and business who had followed him from his hometown of Jieyang to the provincial capital were also taken into custody.
Central to the allegations against the gang from Jieyang were accusations of rigged real estate dealings where Wan’s associates were awarded rights to land and development projects as a result of their association with the powerful party member.
When Zhou Yongkang was taken down that same month, part of the corruption case against the former Politburo member centred on real estate dealings by his son and other family members.
In the case of Wong and Hydoo, the assumption is that the former truck driver built his property empire through less than transparent transactions and through use of his party positions.