Bo Guagua, center, receives an award after being named one of 10 outstanding Chinese young persons in the UK at a ceremony in London in May 2009. (File photo/CNS)
US$557 million is being sought in a Hong Kong lawsuit brought by Deutsche Bank against a Dalian business magnate on a defaulted loan linked to the money laundering activities of disgraced former Chongqing Communist Party chief Bo Xilai, reports the Sound of Hope, a global non-profit news organization reportedly affiliated with the Falun Gong spiritual movement that is banned in China.
According to a Sound of Hope source, the missing funds are currently under the control of Bo's 25-year-old son Bo Guagua, who has remained in the United States following his graduation from Harvard University's Kennedy School of Government. Bo Guagua's mother Gu Kailai was last year given a suspended death sentence for the murder of British businessman Neil Heywood, while his father awaits a criminal trial for offenses including corruption and abuse of power.
Last November, Deutsche Bank sued a company registered in the British Virgin Islands under Fu Yanbin, a Forbes-listed real estate tycoon from Dalian in northeastern China's Liaoning province, after Fu's company defaulted on the loan worth around HK$4.3 billion (US$557 million), inclusive of accumulated interest. The loan had reportedly been set up in December 2007 and was restructured in March 2011.
Deutsche Bank took action after Fu's company defaulted on its first repayment of US$74.4 million last June. According to the source, the loan repayments ran into difficulties following Bo's dramatic fall from grace last March.
Fu was detained by the Central Commission for Discipline Inspection at around the same time Bo was stripped of his primary party posts, along with Xu Ming, another wealthy Dalian businessman linked to illegal economic activities during Bo's time as mayor of the port city between 1992 and 2000.
The 48-year-old Fu attended Peking University, where he became friends with fellow alumni Bo and Gu. He started his business in Dalian around the time Bo became mayor and made a fortune by taking full advantage of Bo's power and influence. He began investing in the southwestern metropolis of Chongqing in 2009, some two years after Bo was appointed the local party chief.
Part of the reason Deutsche Bank was willing to lend such a large sum of money to Fu's company is because of Bo's close ties to Huaxia Bank, which is 20% owned by Deutsche Bank, the source said.
Deutsche Bank knows it cannot recover the funds from the legally registered lender because it is essentially a shell company, but it is trying to go through other diplomatic channels to access Fu's assets in Beijing and Chongqing, which would be more than sufficient to pay off the debt, the source added.
Fu is said to be under close surveillance by the party's Central Commission for Discipline Inspection while he "assists" with their investigations. He was briefly seen in public last October and his future remains in the balance while the authorities complete their case against Bo.
Bo Xilai 薄熙來
Bo Guagua 薄瓜瓜
Gu Kailai 谷開來
Fu Yanbin 富彥斌
Xu Ming 徐明
Zhang Xuan is an alternate member of the 18th CPC Central Committee and deputy party secretary of Chongqing. A native of Luan county in Hebei province, she was born in 1958 and joined the Communist ...