On July 20, 2014, the New York Times published an article entitled “Alibaba’s I.P.O. Could Be a Bonanza for the Scions of Chinese Leaders.” The article appeared in Chinese the following day under the title “The Red Descendants Behind Alibaba’s IPO” (阿里巴巴上市背后的“红二代”赢家). Some excerpts:
In September 2012, the Alibaba Group announced that it had completed a $7.6 billion deal to buy back half of Yahoo’s stake in it. The giant e-commerce company raised part of the money by selling shares to select investors, notably China’s sovereign wealth fund and three prominent Chinese investment firms.These screenshots show what a user of Baidu's recently launched Brazilian search engine - "Baidu Busca" - would find if they were trying to search for that article.
What Alibaba did not detail was the deep political connections of the investment firms, Boyu Capital, Citic Capital Holdings and CDB Capital, the China Development Bank’s private investment arm.
Their senior executive ranks included sons or grandsons of the most powerful members of the ruling Communist Party, according to an analysis by The New York Times. Documents reviewed by The Times also show that a fourth investor bought Alibaba shares that month: New Horizon Capital, a private equity firm co-founded by the son of China’s prime minister at the time, Wen Jiabao.
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By that measure, the $400 million investment in Alibaba made by a subsidiary of Boyu Capital gained more than $1 billion in the same time period. Boyu counts former President Jiang Zemin’s Harvard-educated grandson Alvin Jiang as a partner.
In a country of more than 1.3 billion people, the fact that four Chinese companies investing in Alibaba have had executives who are either sons or grandsons of the two dozen men who have since 2002 served on the Politburo Standing Committee, the most elite group of leaders, speaks to how deeply China’s political class has attached itself to the highest echelons of finance.