Fate of China’s Top Billionaires: Shrinking Wealth, Bankruptcy, or Arrest

A general view of Tiananmen Square under rain clouds in Beijing on July 4, 2013. Feng Li/Getty Images

News Analysis

Amid China’s ongoing economic decline, multiple top Chinese billionaires saw their fortunes greatly diminished, companies went bankrupt, and some were arrested or fled the country.

Billionaire Goes Missing, Company Balance $51.25

On April 3, the court in Beijing announced the bankruptcy of Yinji Entertainment and Media, also known as DMG Media, Chinese media outlet National Business Daily reported.

DMG Media, once a Chinese entertainment giant, has officially declared bankruptcy, while the chairman, also the top billionaire of Sichuan Province, Peter Xiao Wenge, has disappeared after cashing out more than $600 million.

According to the media’s report, the company was founded in 2008. In 2015, DMG Media completed a backdoor listing and officially debuted on the A-share market.

In about 2015, Mr. Xiao held shares valued at more than $4 billion at its peak stock price of $6.16 and a market capitalization of nearly $6.91 billion.

The company’s meltdown started in 2018, however, and it experienced a sharp decline in performance.

Mr. Xiao has reduced his holdings in DMG Media twice, cashing out a total of about $330 million during its business collapse in 2018, according to Chinese state media outlet The Paper.

According to a report by Chinese media outlet The Cover, he has cumulatively cashed out roughly $610 million from the listed company.

Of the three founding members, Dan Mintz, an American filmmaker, has long gone missing; Mr. Xiao resigned as the chairman in 2015; and Wu Bing, in charge of management, has moved back to the United States as a U.S. citizen, according to National Business Daily reports.

Stock Plummets Billions in 1 Day

On April 9, the stock of China Tianrui Group Cement mysteriously plunged by 99 percent, cutting its market capitalization to HK$141 million ($18 million) from HK$14 billion ($1.7 billion).

According to its official website, the company is a leading manufacturer of cement clinker in Henan and Liaoning provinces, with an annual production capacity of about 35 million tons of clinker and 58 million tons of cement, and also one of the 12 large-scale cement enterprises nationwide supported by the regime.

Li Liufa, chairman of Tianrui Cement, was twice named the richest man in Henan Province on the New Fortune 500 Rich List by New Fortune magazine, in 2011 and 2012.

According to a report in China Times, following the sudden plummet of Tianrui Cement’s stock price, there were reports indicating that Tianrui Cement lines at Zhengzhou had ceased production.

In response, Tianrui Cement stated, “The suspension of individual plants is in response to the demand for off-peak production and is not due to operational issues.”

In recent years, China’s cement industry has adopted peak-shifting production to address overcapacity issues.

Affected by the overall downturn in the Chinese cement industry, Tianrui Cement’s operating income in 2023 decreased by nearly 30 percent year on year, with a net loss of 634 million yuan ($87.58 million).

Former Richest Man in China Under Investigation

Li Hejun, founder of solar energy giant Hanergy, was detained by police on Dec. 17, 2022, in the northeastern Chinese province of Liaoning. He once topped the Hurun Global Rich List in 2015, becoming the richest person in China.

Radio Free Asia reported that his detention could be linked to the troubled Bank of Jinzhou, which funded its 2015 initial public offering in Hong Kong with nearly 10 billion yuan ($1.5 billion).

The Slaughter List

In December 2015, the Hurun Report released a China Rich List special report showing that over the 17 years since the publication of the China Rich List, 35 of those listed were jailed, charged, or even executed, mainly for serious legal violations for economic reasons.

Since its launch in 1999, the Hurun Report has been dubbed a “slaughter list” by local media, because many of the entrepreneurs on the list have run into trouble with the law.

According to the report, Huang Guangyu, founder of GOME Electrical Appliances, was the wealthiest of the 18 imprisoned Chinese billionaires.

In 2015, Mr. Huang still ranked No. 87 with a net worth of 22 billion yuan ($3 billion). He was arrested in 2008, and in 2010, he was sentenced to 14 years in prison and fined 600 million yuan for “illegal business operations, insider trading, and bribery.” Mr. Huang’s assets, worth about $27.63 million, were confiscated.

In 2016, when the Hurun Report released another Hurun Rich List, multiple Chinese media outlets also reported 12 troubled Chinese billionaires. Apart from Mr. Huang, who was in prison, two individuals were awaiting sentencing, seven were under investigation, one was under residential surveillance, and one had disappeared or emigrated abroad.

According to the Hurun China Rich List 2017, Xu Jiayin, founder of Evergrande Group, became China’s richest man, with assets worth $43 billion.

Evergrande defaulted on its debt in 2021, with its operating conditions continuously deteriorating. That year, Evergrande owed suppliers, creditors, and investors a total of 1.96 trillion yuan ($270 billion).

In September 2023, Mr. Xu was reported to have been taken away by the police.

Li Jing contributed to this report.