Business / Economy

Yurun's cup of woes runneth over

By Zhu Wenqian (China Daily) Updated: 2015-03-31 08:22

Zhu Yicai, the billionaire chairman of Yurun Holding Group Co Ltd, has been placed under residential surveillance by authorities since last Monday, said a notice released by the company on Monday.

The Jiangsu-based company said it received a notice from Zhu's family on the matter on Thursday, and said it did not receive any legal documents from prosecutors and legal authorities. It is likely that Zhu was placed under residential surveillance for the company's real estate projects, said media reports.

Yurun is also possibly under anti-corruption investigation by authorities. The case has become one of the latest incidents of Chinese officials and businessmen being investigated for serious economic offenses.

Zhu and his wife were ranked 26th on Hurun China Rich List in 2014 with their net worth estimated at about $5.3 billion, making Zhu the richest person in Jiangsu province.

The 51-year-old Zhu was born to a poor family in Anhui province. He started his own business in 1989 with just 200 yuan, and his ambition was to build Asia's largest meat processing plant.

China Yurun Food Group Ltd, a diversified enterprise with businesses engaged in several sectors including food production, real estate, commerce, logistics, tourism, finance and construction, was one of China's largest meat-processing companies.

The company was ranked eighth in the top 500 Chinese private manufacturing enterprises of 2014, according to the All-China Federation of Industry and Commerce.

Yurun's Hong Kong-listed share has been suspended from trading since Friday, pending announcement of information pertaining to insider trading.

Yurun's subsidiary, A-share listed company Nanjing Central Emporium, also suspended trading on Friday, but re-opened on Monday, with shares of the company dropping by 4.29 percent. Shares of both companies have been plummeting in the past few days before trading stopped.

In late 2013, Ji Jianye, former mayor of Nanjing, provincial capital of Jiangsu province, was investigated for suspected discipline and law violations. Ji, 56, became acting mayor of Nanjing in 2009 and has served as Nanjing mayor since January 2010. He was accused of being linked to more than 20 million yuan ($3.2 million) worth of corruption cases.

On the other hand, Yurun Group launched a strategic cooperation with American film production company DreamWorks Studios in 2013, aiming to introduce arena shows to the Chinese market. Yurun planned to invest $1 billion on its alliance with DreamWorks to make further inroads into the entertainment and cultural industries.

DreamWorks said the cooperation between Yurun and DreamWorks ended in 2014.

Ben Cavender, principal of the Shanghai-based China Market Research, said: "I don't have any insight into what information is going to be released about wrongdoing at the company, but typically when this happens to a company chairman who has been a driving force behind the company's expansion, as is the case with Yurun, it can mean that the fallout for the company can be quite severe."

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