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
I knew it was incident season but I went anyway. A mistake i have learned from: from this point onward, until the disputes are resolved or my thesis is finished, i vow never to take a holiday in July, unless the destination is the South China Sea. Ten days after my return, i’ve only just finished properly studying all the recent action. The next few posts will sketch out in basic chronological order, recent developments as seen through the PRC’s major internet news media.
The establishment of Sansha City looms large. According to a keyword study of 15 major Chinese newspapers, it was in the top five most-mentioned domestic politics-related terms in the first 6 months of 2012 — a (suspiciously) remarkable achievement, given that its creation was only announced on June 21. There is no doubt, however, that Sansha has been very heavily covered in China’s state-controlled media since its announcement. The extent to which it has “attracted” this attention or had this attention ordered towards it is, of course, hard to say — the answer is clearly both, but in what proportions?
The flurry of first-hand accounts of visits by reporters began well before the opening ceremony on June 24. Beijing Youth Daily reporter Li Chen 李晨 visited on July 2, filing a story that ran on July 9 under the headline, ‘Hello, Sansha’. (The story was made available in English by the China Daily but the translation has since been taken down. It remains online here.) This was accompanied by the graphic above, with the nine-dashed line superimposed. It began:
Would you be surprised if I told you there was a city with an area equivalent to one quarter of China’s territory?
The graphic and the opening line show that the view of the nine-dashed line as representing China’s territorial waters, far beyond the officially-stated claim to the islands within, continues to be propagated through the official media. The apparent lack of desire to educate the Chinese public on the limits of China’s claims in the South China Sea suggests that the government sees nationalistic public opinion on the issue as more of a weapon than a threat.
Li Chen’s report also ran prominently in the July 15 edition of the Shanxi Evening News, but there were numerous other accounts of visits to Sansha around that time. Notable among them was this ‘Exclusive visit to South Sea frontline Sansha’ from the intrepid Cheng Gang 程刚 of the Huanqiu Shibao, who wrote that he was making his fifth visit to Woody Island/Yongxing 永兴岛. Some of Cheng’s reporting was made into an English-language article for the Global Times, but many of the interesting details have been left out.