Landing International Shares Drop after Yang Zhihui Disappears
Shares of Landing International Development dropped nearly 50% after its chairman, Yang Zhihui, was reported to be missing on Thursday. While Landing International released a statement that Mr. Yang’s disappearance would not have an “adverse impact”, shareholders reached different conclusions.
Bloomberg News reported, “Company officials have been unable to reach Yang since Aug. 23, Landing said in a Hong Kong stock exchange filing Thursday. Caixin reported earlier that Yang is a target of investigators looking into ties with China Huarong Asset Management Co., a state-owned bad-debt manager whose former chairman, Lai Xiaomin, is under investigation for alleged corruption.”
The owner of the casino and hotel company, which owns one of South Korea’s largest casinos, is not the first executive of a Hong Kong-listed company to go missing. Several top executives of Hong Kong or mainland Chinese companies have disappeared without a word in the past several years.
China Huishan Dairy’s CEO disappeared in June 6. Two days later, Huishan’s board announced that most of its cash, $357 million of $426 million, also was missing. The next day, Huishan’s stock dropped 91% in a huge sell-off.
Wu Xiaohui’s Disappearance
Around the same time, Wu Xiaohui, the chairman of Anbang Insurance Company, which owns the Waldorf Astoria Hotel in New York City, also went missing. In Mr. Wu’s case, he was detained by Chinese authorities for questioning.
Even those disappearances were part of a wider pattern. In 2015, a string of Chinese executives suddenly disappeared, as they were seized by Chinese anti-corruption authorities in a widespread crackdown.
The Case of Xiao Jianhua
For instance, in January 2017, Xiao Jianhua, the head of the Tomorrow Group holding company, was taken from his suite at the Four Seasons Hotel in Hong Kong to the mainland. Jianhua, who held stakes in banks, insurance companies, and property developers, fled mainland China in 2013 in the first wave of the crackdown.
Mr. Xiao had been alerted he was under investigation, so he fled to Hong Kong and took up residence in a Four Seasons apartment. It is widely assumed Xiao was abducted back to China by Chinese security forces, though the Beijing government has released no official statements on Xiao’s abduction. 18 months later, no one is still certain what became of Xiao.
What is know is that Tomorrow Group managed the finances of high-ranking communist party officials — and those of their family members. Before 2013, it generally was safe to manage communist party members’ finances, but then Xi Jinping’s anti-corruption crackdown took place. Xiao Jianhua is thought to have handled the finances of the Jiang Zemin faction — including the children of Zeng Qinghong and Zhou Yongkang — which held tremendous sway in China after the death of Deng Xiopeng and the Eight Elders grew too old to hold influence.
Those connections appear to have been the undoing of Xiao Jianhua, at a time when the political winds blew another direction.
Business Operations during the Crackdown
American business people described the bizarre work environment at the time. One day, they would be conducting business with a company owner and the next day they would be carried away for a summary trial.
Chinese authorities conduct meticulous investigations of an executives, while mainland China’s justice system does not allow for the kind of rigorous defense one would see in a western court. Over 99% of those who face trial end up being convicted.
Junket Operators Flee with Cash
In the Chinese casino industry, another pattern persists, which looks more like the case of China Huishan Dairy. Several Macau junket operators fled the country, taking with them tens of millions or hundreds of millions of dollars with them. Especially when it involves a Chinese gaming-related firm, investors grow concerned that a missing executive has fled the country and taken most of the operating capital with them.
Under the circumstances, it is no wonder that a company’s share prices take a huge plunge on the news of a missing executive. That is why Landing International Development executives (picture above at NayonLanding groundbreaking) went into damage control mode by releasing the statement, “does not expect that the [temporary] absence of Mr. Yang would have any material adverse impact on…daily business operations and financial positions.”
Whether Yang Zhihui was abducted back to the mainland for interrogation by Chinese security forces or he fled the country with millions in cash ahead of the authorities, Landing International Development’s operations have been disrupted. What his disappearance means for the future of the NayonLanding project in Manila or the $2.2 billion resort on Jeju Island in South Korea is anyone’s guess.