In Depth: Ousted PE Executive Tests Power and Profit Sharing in China’s Mixed-Ownership Funds

Since 2021, Mao Jiangtao has found herself unable to work despite winning repeated legal battles regarding her role at Jiangsu Soho The Belt and Road Capital Management Co. Ltd. (The Belt and Road Capital). Although arbitration panels and multiple courts in Nanjing have ruled that her removal as general manager in late 2021 was invalid and ordered the company to keep its open-ended labor contract with her active, she claims she still cannot return to her office. Courts also voided the board resolutions that stripped her of her position and ordered over 2 million yuan ($280,000) be paid to her in overdue wages and allowances. However, her workplace access remains blocked [para. 1][para. 2][para. 3][para. 4].

The Belt and Road Capital was created in 2015 under China’s mixed-ownership reform. It is a private equity (PE) fund manager equally owned by the state-owned Jiangsu Soho Investment Group and the private Nanjing Mingdao Capital Management Enterprise. Mao’s ouster reportedly followed a falling-out with Xue Binghai, a former chairman at Soho Investment Group. While Mao alleges that Xue misled state authorities about her, accusing her of risks and misconduct regarding state assets, Xue denies personal motives, claiming he was fulfilling his corporate and party duties [para. 5][para. 6][para. 7][para. 8].

This dispute unfolds within China’s PE industry, where state capital is increasingly dominant as a funding source. What distinguishes this case is that despite the fund manager delivering good returns to state investors, the core conflict is now over the manager’s own compensation and earnings [para. 9][para. 10].

The Belt and Road Capital has managed nearly 5 billion yuan in state-related capital, establishing three funds with a total paid-in capital of 4.6 billion yuan. For example, the Jiangsu One Belt One Road Investment Fund—set up in December 2015—counts the Department of Finance of Jiangsu Province and Soho Holdings as main limited partners, while The Belt and Road Capital is the general partner and manager. The fund invested in 17 projects from 2016 to 2020; most have exited, and all principal and required returns have been distributed to limited partners, with only a few investments left to be exited [para. 11][para. 12][para. 13][para. 14][para. 15].

By 2023, the fund had returned all partners’ principals and delivered an annualized return of 6%. Audits and reports show that from 2016 to 2024, The Belt and Road Capital earned significant income—234 million yuan, composed of 162.2 million yuan in management fees, 60.6 million yuan in carried interest, and 11.1 million yuan in other income. This substantial income is a major point in the conflict, with Soho Investment arguing that some fees must be retained for ongoing management expenses and not all funds can be distributed yet due to unfinished projects. Soho Investment criticizes Mao as being too eager to secure her financial interests [para. 16][para. 17][para. 18][para. 19].

Mao’s removal as general manager by Soho’s state representatives led to more than 30 lawsuits and arbitration cases. In 2025, Mao escalated her grievances to higher provincial and national authorities, asking for outstanding compensation, retirement processes, and a facilitated exit through share buyback or capital reduction. Soho Holdings, however, insists that as a politically significant entity supporting the Belt and Road initiative, The Belt and Road Capital cannot trade or liquidate private stakes as requested, given political and strategic considerations and remaining project obligations. They further argue that the group’s state backing was critical to the fund’s fundraising success, suggesting that positive results were not due solely to Mao’s personal abilities [para. 20][para. 21][para. 22][para. 23][para. 24][para. 25][para. 26][para. 27].