Thanks to his company's $3.7 billion IPO last December, Wang Jianlin, the chairman of Chinese real estate developer Dalian Wanda, is by many counts China's richest man. By Forbes' Real Time count, he is the second richest in China.
How the former army officer built his $32.2 billion fortune, just 12 years after Wanda constructed its first mall in northern China, reveals the depth of ties between government and business in China, even for ostensibly private companies such as Wang's.
In a report that was prepared over more than 18 months, and which cost the then-Bloomberg reporter his job and brought about the resignations of at least two editors, current New York Times reporter Michael Forsythe details how family members of Chinese leaders such as Xi Jinping and Wen Jiabao acquired stakes in closely-held Wanda during the company's meteoric rise.
Wanda's Wang Jianlin isn't likely to start talking about his ties to families of top Chinese... [+]
Following Wanda's Hong Kong stock listing, these relatives of ranking officials walked away with a paper profit of more than $1.5 billion.
Wang announced earlier this month that the company now plans to build 900 more malls in China in the coming decade, to bring its retail portfolio to more than 1000 properties. Simon Property Group, the US' largest real estate investment trust currently controls a portfolio of 325 properties.
Wanda Rose in Tandem with Government Ties
In China, where all land belongs to the state, securing sites for new real estate developments typically requires strong relationships with the government. Wang, who was a local government official in the norther Chinese city of Dalian before starting his real estate career, has done a masterful job of aligning Wanda with some of the country's most powerful people.
By reviewing corporate records filed by Wanda since 2007, Forsythe found that one of the first investors given the opportunity to invest in Wanda was Qi Qiaoqiao, the older sister of China's paramount leader, Xi Jinping. Qi, who is an active investor in China, apparently transferred her shares to what the Times refers to as “a longtime business associate” in 2013, just over a year before Wanda went public, and at just about the same time that word was leaked about Bloomberg linking Wang to the families of high ranking officials.
Other investors who got in early with Wanda included relatives of two more members of China's Politburo, the country's top-ranking political body.
Since those early days, Wanda, which specializes in commercial real estate development in China and has now opened more than 100 shopping malls and 80 five star hotels across the country, has brought on board more family members or business associates of China's political elite.
According to the Time's research, Wanda's pre-IPO shareholders also included relatives or close business associates of former Hu Jintao, the former Chinese president; Wang Zhaoguo, the former Vice-Chairman of the National People's Congress (China's top legislative body); and Jia Qinglin, who was ranked fourth among the country's Communist Party leadership from 2003 to 2013.
Times Report Likely to Rile China's Leadership
With Wang having established himself as one of China's highest profile international investors, and Xi having made the integrity of Chinese officialdom one of the pillars of his leadership, this latest report by The Times is sure to lead to denouncement of the newspaper by China's official press and further attempts to clamp down on the international media in the country.
The New York Times' website has been blocked in China since 2012, when an earlier report by the newspaper linked relatives of then Chinese Premier Wen Jiabao to a series of lucrative business deals. Since then the company's website has been the target of a series of cyberattacks which some sources have connected to Chinese organizations.
It was fear of this type of reprisal that led then-Bloomberg news chief Matt Winkler to reportedly spike a news story linking China's political elites to a leading business figure in 2013, just one month after Xi's older sister is said to have transferred her stake in Wanda.
The Times' Forsythe, who was working for Bloomberg out of Hong Kong at the time the story was spiked, left the news organization shortly after word was leaked of the report being repressed.
According to my own communication with people familiar with that Bloomberg story, the subject of the spiked report was Wang Jianlin, who by then was already ranked as China's richest man by Forbes.
Now with Wanda having used the proceeds of its government-related, but privately-held, empire to acquire billion dollar development sites in Sydney, New York and London, as well as buying the US' second-largest theater chain, the revelation of Wang's ties to China's political elite are sure to spark more controversy about the lack of transparency in China's real estate markets.
