Graphics: GT

 

Businessman Guo Wengui's Pangu Plaza, a landmark building in northern Beijing. Photo: CFP

Editor's Note:

Zhang Yue, former head of the Hebei Provincial Political and Legal Affairs Commission and a member of the province's Party committee, is being probed for corruption, the authorities announced on April 16. Chinese media followed with reports revealing the details of Zhang's connections with controversial businessman Guo Wengui and a disgraced vice minister of State security, describing how they formed a powerful network to demolish political and business competitors.

Guo Wengui, boss of real estate company Beijing Zenith Holdings that owns the landmark Pangu Plaza near the Olympic Green in northern Beijing, reportedly created a "Pangu Club" that gathered together senior government officials and rich businessmen. With the help of these powerful friends, Guo got rid of his political and business rivals on his way to the top.

But since then, many of Guo's friends have been jailed or put under investigation. Zhang Yue, former head of the Hebei Provincial Political and Legal Affairs Commission and a member of the province's Party committee, is the latest to fall.

The Communist Party of China's (CPC) Central Commission of Disciplinary Inspection announced on its website on April 16 that Zhang is being investigated for "seriously violating disciplinary rules." On Sunday, the authorities said the Party has decided to remove Zhang from his CPC posts.

Media reports said Zhang's downfall is linked to his part in jailing Guo's rival Qu Long, former head of Beijing Zhongyin Investment.

Qu, a former business partner of Guo, broke with Guo over business disputes and tried to report Guo for the illegal practice of "seizing State assets." After Zhang intervened, Qu was jailed on charges of "misappropriation," China Business News quoted multiple sources as saying.

In 2013 a Hebei court sentenced Qu to 15 years behind bars. Stocks that Qu owned in two companies in Beijing and Tianjin, and four properties worth more than 11.64 million yuan ($1.79 million), were transferred to Guo's firm.

Sources also told the media that Zhang helped Guo in handling other business disputes.

Arresting Qu

On March 31, 2011, Qu was arrested on charges of "illegally possessing firearms," and detained in the police bureau of Chengde, Hebei. Reports said Zhang and Ma Jian, former vice minister of State security, who was also part of Guo's "club," led a dozen people to ambush Qu's car, smashing the car's windows before arresting him.

The next day, Guo finished the paperwork to become the major shareholder of China Minzu Securities, previously a State-owned company.

A January 2015 official statement said Ma was under investigation for alleged "serious violation of discipline and laws."

According to materials acquired by China Business News, in March 2011 when Guo was about to acquire China Minzu Securities, Qu submitted whistle-blowing reports to Party disciplinary authorities accusing Guo of seizing State assets.

Guo allegedly told Qu that his days were numbered. Soon after, Qu was arrested.

Sources told China Business News that Qu's charges were later changed to misappropriation. Zhang, as head of Hebei's political and legal affairs commission that supervises the province's legal work, interfered in Qu's case, calling it a major case concerning the Ministry of State Security.

Zhang called officials at the Chengde Intermediate People's Court during the second hearing, demanding they ensure that Qu receive the "highest punishment." The court ruled that Qu had misappropriated 855 million yuan and sentenced him to 15 years in jail.

Guo's followers

According to media reports, including an April 22 Beijing News report, Zhang was quickly promoted up the ranks of Beijing's public security bureau, thanks to his wife's connections with China's former security chief Zhou Yongkang. Zhang's wife Meng Li and Zhou's wife Jia Xiaoye were colleagues and close friends at China Central Television's financial channel.

In 2001, Zhang was made deputy chief of the Beijing Municipal Public Security Bureau. In 2003, he became a bureau chief of the Ministry of Public Security. In 2007, he was made Party chief of Hebei's provincial public security department. Within a year, he rose to become head of Hebei's political and legal affairs commission, a member of the Standing Committee of the CPC Hebei Committee, while still heading the provincial public security bureau.

Media reports said Zhang was arrogant and had a bad temper, regularly shouting abuse at colleagues during his work. Because of his political power, he was locally known as the "King of Hebei."

However, in front of real estate tycoon Guo, Zhang was like a follower, a source close to Zhang and Guo told the China Business News.

Once when Li You, former CEO of Beijing-based IT giant Founder Group, was visiting Guo at his office. Guo told Li that "If I ask Zhang Yue to come in two hours, he dares not be late." Indeed, just two hours later Zhang arrived at Guo's office, having rushed to Beijing from Hebei, according to the source.

After introducing Li to the Hebei political and legal affairs chief, Guo told Zhang to sit at a chair near the door instead of an empty sofa set aside for guests, the source said.

Li later turned against Guo after a business dispute. In January 2015, Li and several other Founder executives were taken away "to assist the authorities in an investigation," according to a report by Caijing magazine.

Guo also reportedly brought down Liu Zhihua, a former vice mayor of Beijing, through a sex video he secretly recorded, and won the right to purchase the land on which Pangu Plaza is built.

Guo fled overseas before Zhang was put under investigation, and is still at large, reports said.


Newspaper headline: Magnate mafia