The company initially tried to refute this as “irresponsible” reporting, but investors opted to believe China’s leading investigative journalism outlet, and the company’s bonds dropped by 33% in a day.
But the party-state authorities’ ban on reporting about Chairman Ye and his empire of enterprise (documented here in 2017) remains in place, so Caixin‘s scoop was expunged from the PRC internet within hours.
The news was officially confirmed more than two weeks later, on March 19, when the Czech Republic sent a delegation to find out what was going on with its major source of foreign investment. The delegation was told that Chairman Ye, an advisor to Czech President Milos Zeman, was indeed “being investigated for a suspicion of breaking the law.”
CEFC was ranked 222nd in the Fortune 500 in 2017, and last year stunned the international energy industry by securing agreement to buy a $9 billion, 15% stake in Rosneft, Russia’s state oil giant.
Now the company’s future is as murky as its past.
Caixin reporter Ji Tianqin 季天琴 spent the most of 2017 interviewing CEFC executives, tracking down former associates of Ye, and tracing CEFC’s constellation of satellite companies through the financial records. And the crowning glory: she interviewed Ye himself twice, finding all manner of holes in the stories he told her.
Ji Tianqin is famous in Chinese journalism circles for her award-winning deep-dives addressing, among other things, Wang Lijun’s reign of terror in Chongqing. Considering the difficulty of being an investigative reporter in China today, she really ought to be famous outside China too.
This epic investigation into CEFC reveals how, through party and military connections, turnover figures massively inflated by fake trading, and relentless pursuit of international photo-ops and status symbols, Ye Jianming was able to sell domestic and foreign audiences a mostly vacuous narrative about his rising global energy and finance colossus.
Suffice to say, these revelations extend my record of getting some things right about CEFC, but not very many. I’ll leave that discussion for another post, as my purpose here is to urge China-watchers to invest the time in dipping into the 16,000-word translation below — and to please share thoughts on what it all means. I’d also welcome any translation corrections from people more familiar with financial and business terminology.
This is a spectacular work of Chinese investigative journalism that may contain some profound implications for understanding the PRC’s economy, politics and international relations.
Ye Jianming under investigation, what fate will befall CEFC?
By Ji Tianqin
After a three-week tour of the Paracels, Spratlys and Scarborough Shoal, the Huanqiu Shibao‘s special South Sea correspondent Cheng Gang 程刚, an experienced war journalist, filed a lengthy feature story that ran in the paper’s June 1 edition. It was titled, ‘Fisherfolk’s grief: we don’t fire the first shot, countries occupying the islands have fired countless shots‘.
It was really good reading, with loads of interesting detail, so i’ve done a summary translation. The photos are inserted to illustrate the places Cheng is talking about — i’ve attempted to link to the source wherever i have it on file, but they are taken from all over the internet, including Google images, Google maps, Panoramio and Vietnamese social networking sites, so if one belongs to you please don’t hesitate to demand a credit.
Cheng’s piece starts by describing how May is the best time to be sailing on the South Sea, because the northeast wind has blown out but the southwest monsoon and associated typhoons haven’t yet arrived. Seabirds abound and dolphins follow the boat through the glassy blue waters. “The beauty of each day is far beyond picture scrolls,” Cheng writes, “but as a Chinese person who pays attention to the South China Sea issue, travelling with Chinese law enforcement boats on patrols through the Paracels, Spratlys and Zhongsha [ie. Scarborough Shoal and the Macclesfield Bank], this Huanqiu Shibao reporter could hardly think about the intoxicating views; on the contrary, it was more regret and unease.”
At Fiery Cross Reef 永暑礁, site of the PRC’s biggest Spratly installation [and a UN-sponsored meteorological station] reporter Cheng witnesses “a certain country’s” fishermen blatantly refusing to obey instructions to desist in their fishing activities, until finally a duty vessel was sent out and they resentfully left. “Fiery Cross Reef is Mainland China’s biggest reef fort 礁堡 in the Spratlys, and the place where its garrisons are the strongest. If it’s like this at Fiery Cross Reef, one can imagine how the situation in other areas is even more turbulent.”