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
Since this blog last checked in with Ye Jianming in 2013, the youthful Chairman and his $40 billion CEFC (Huaxin) oil trading, storage and finance conglomerate have gone from strength to strength. It now ranks as the world’s 229th largest company by revenue.
CEFC originally attracted my attention due to Dai Xu‘s South China Sea warmongering under a “CEFC Strategic Analyst” title between 2011 and 2013. The company hasn’t been associating itself with that kind of militarism of late (at least not publicly), but its mystique has only intensified as various new information has come to light.
Here’s a brief rundown of what’s emerged since 2013:
- Chairman Ye Jianming is not Lt-Gen Ye Xuanning’s son, nor Marshal Ye Jianying’s grandson. Far from being a princeling — my own and others’ best guess as to his background — he was born into a family of boatmen in the Fujian hinterland.
- However, just as a blood relationship was finally disconfirmed, Chairman Ye turns out to be business partners with Ye Xuanning’s daughter in an entity bearing the PLA’s famous Carrie (凯利) brand.
- The company’s oil trading business originates with assets confiscated from Fujian smuggling kingpin Lai Changxing, which it acquired in 2006. Chinese financial media reporting indicates that before becoming an oil baron, Ye made pots of gold by purchasing a state-owned piston factory, and wholesaling the industrial chemical PX.
- Evidence of Chairman Ye’s involvement in the PLA General Political Department Liaison Department’s (GPD-LD) CAIFC system has continued to accumulate. Yet the GPD-LD’s fortunes appear to have been falling almost as fast as Chairman Ye’s have been rising.
- There are signs the rise of Chairman Ye may be related to the rise of Chairman Xi — from Fujian via Shanghai, to Beijing, and out onto the Belt and Road. CEFC/Huaxin laid the groundwork for Xi’s triumphant state visit to the Czech Republic in March 2016, establishing a “key link” in his signature foreign policy initiative.
For those who find this all as irresistably intriguing as i do, these points are detailed below, followed by a selection of aphorisms from the expanding corpus of Ye Jianming’s Thought, and a brief personal disclaimer.