Fraudster Posing as BYD Executive Leaves $164 Million Money Trail

* Major English soccer team duped out of $179,000 by phony representative of Warren Buffett-backed Chinese automaker

*Domestic media reports suggest suspect may have tricked as many as 30 advertising companies into signing fraudulent contracts in BYD’s name

(Beijing) — English soccer giant Arsenal F.C. thought it was onto a winner when it held a signing ceremony in April, not to nab a new star player, but to announce that the Chinese largest electric-vehicle maker, BYD Co. Ltd., was its “official car and bus partner” in a 1.2 million yuan ($179,000) deal.

But the BYD representative whom Arsenal believed to be signing and stamping the contracts at the club’s stadium was in fact a fraudster with a forged seal. On Friday, the world’s sixth-richest soccer team issued a statement saying it was the victim of fraud, and both Arsenal and BYD were investigating.

BYD has recently issued four notices identifying the alleged fraudster as Li Juan and her accomplice as Chen Zhenyu, stating that the pair are not company employees. Both are now in the custody of Shanghai police.

Domestic media reports suggest Li may have tricked as many as 30 advertising companies into signing fraudulent contracts in BYD’s name, and owes those that have been duped around 1.1 billion yuan, according to another victim, Shanghai Jingzhi Advertising Co. Ltd.

The scandal appears to have weighed on market confidence in the Warren Buffett-backed carmaker, whose shares on the Hong Kong Stock Exchange fell by 8% over the weekend through Tuesday’s close, followed by a slight recovery on Wednesday.

Li’s exact identity remains unclear, but it appears that she worked in some capacity for Shanghai Yuhong Culture Communication Co. Ltd., a company that was legitimately working with BYD to support the carmaker’s advertising efforts. According to company insiders, BYD did not realize that Li had dealings with BYD while posing as the head of Shanghai Yuhong.

At the same time and under her own name, Li started meeting with would-be advertising subcontractors while pretending to be the BYD’s East China marketing manager. She set up an office with the BYD logo at the front desk in the prestigious Shanghai International Finance Center, and signed deals using a fake seal.

One duped company was Shanghai Rigo Advertising Co. Ltd., which signed a contract with Li in July 2017 to put up various advertisements worth around 80 million yuan. However, in May, after not receiving payment, it then contacted BYD, which then began its own investigation into Li’s activities.

It remains unclear what Li gained in exchange for allegedly posing as a BYD representative.

Contact reporter Ke Dawei (daweike@caixin.com)