Caixin
Dec 24, 2014 03:01 PM

Nephew of Disgraced Official Ling Jihua Involved in Tangled Web of Businesses

(Beijing) – The investigations into Ling Jihua, vice chairman of the Chinese People's Political Consultative Conference, and his two brothers, Ling Zhengce and Ling Wancheng, have shed light on a powerful family that had a grip on both government resources and business wealth.

Ling Jihua saw his career enter a promising track in 1999 when he was named vice director of the General Office of the Communist Party's Central Committee, a body in charge of the routine administrative affairs of the party's nexus of national power. He later rose as high as the head of the office and member of the Central Committee.

Meanwhile, his older brother, Ling Zhengce, built up his power in the family's home province of coal-rich Shanxi. Ling Zhengce was the vice chairman of the northern province's political consultative conference before an inquiry started into him in June. He previously headed Shanxi's development and reform office, which decides how the coal reserves in the province – about one-quarter of the nation's total – should be exploited and sold.

As Ling Jihua and Ling Zhengce climbed the ladder of officialdom, their family members profited from their connections. Their youngest brother, Ling Wancheng, ran massive businesses in the media sector and financial market. Sources close to the matter said Ling Wancheng was detained in October.

The oldest brother of the five Ling siblings, Ling Fangzhen, died years ago, but his wife, Sun Shumin, and son, Linghu Jian, have run a business empire involving advertisement, public relations, exhibitions and conference services. Their clients ranged from government agencies to state companies and multinationals.

Linghu Jian was adopted by Ling Jihua after his father died, and sources close with knowledge of the matter said Linghu Jian moved to the United States.

Pieces to the Puzzle

Linghu Jian and his mother have had their names on a large number of company registration documents from 2002 to 2005, many of the firms under an umbrella called Qiangshi Zongheng Group. The company was renamed Trends Communications Group in 2009. Sun has held stakes in more than 10 firms.

In October 2001, a company named Qiangshi Culture Communication Co. was set up in Beijing with registered capital of 2 million yuan. Its initial shareholders were four individuals, including Li Jun, the brother in law of Ling Wancheng and vice general manager of online video service provider letv.com. Li has been detained in connection with Ling Wancheng, sources say.

In November 2001, the four investors set up Qiangshi Advertisement Co., then in November 2004, they transferred all their stakes in the two companies to Sun and Linghu, as well as another man named Guo Lei. Sun held 95 percent of both of the two firms.

Business registration documents show the two companies cancelled their registrations in 2005.

Sun and Linghu have been active in advertising businesses. In March 2002, Sun partnered with a native of the northeastern province of Jilin named Li Shuling to set up Beijing Pinshang Advertising Co. In the following years, the firm underwent several shareholding changes. Then in 2013, Sun took ownership of half of the company, which has registered capital of 500,000 yuan.

Beijing Pinshang advertised itself as a sister company of Qiangshi Culture, and says it has "established partnerships with central government departments whose clients of more than 600 domestic listing companies."

Sun is also an investor in Pingshang Xingye Financial Investment Advisory Co., which registered with the same address with Beijing Pinshang in a residential compound in 2003. In a company profile, Pingshang Xingye says it "has strong government relationship."

Neighbors in the compound said the apartment is often empty and seldom has visitors.

In August 2004, Linghu and three others set up a public relations consulting firm with 500,000 yuan in Beijing, then cancelled it four years later.

Also in 2004, Sun and two others registered Beijing Huanguang Advertisement Co. The three withdrew from the firm in 2010. An employee of a district government where the company is registered said Huanguang has never had real business operations.

In 2005, Sun and Linghu registered another three companies engaged in technology, advertisement and public relation services under the name of Qiangshi, but all three were cancelled between 2006 and 2008.

However, Qiangshi Group's name appeared in public documents for several major marketing promotion campaigns, including some during the 2008 Olympics in partnership with the event's organizing committee.

In November 2009, Qiangshi Group was renamed Trends Communications Group. It also set up a joint venture with British company called Newland UK Ltd. The group's subsidiaries have undergone reshuffles and many of the earlier registered Qiangshi companies have been cancelled. Sun and Linghu no longer appeared on the investor lists of the existing subsidiaries. However, another three individuals, Guo Lei, Shi Lei and Guan Hao, are the main shareholders of most of the Trends Communications subsidiaries.

Company documents show that in the late 1990s Guo Lei worked for China Global Public Relation Co., a subsidiary of the official Xinhua News Agency, and has close business ties with an advertising subsidiary under Xinhua called China National United Advertising Co. Ling Wancheng was the general manager of United Advertising at the time.

Shi Lei and Guan Hao were both directors of Zhonghaijian Trade Co., a steel trader and business partner of Qiangshi Group.

The names of the three have also appeared frequently as partners of Sun and Linghu in their previous company registrations.

Trends Communications has shown strong business capacity. According to the company website, since 2002, its clients include China Telecom, China Mobile, China Unicom, Sinopec, Coca-Cola, Samsung, Unilever, and many government or party departments such as the Communist Youth League and the Beijing Tourism Bureau.

The company also said it set up partnership with the state broadcaster CCTV's finance and economic channel in 2006. A source close to the matter said the channel's director, Guo Zhenxi, had close ties with the Ling family. Guo was detained by prosecutors amid a corruption probe in late May.

(Rewritten by Han Wei)

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