BUSINESS

In Depth: How the Gree Windfall Got Squandered

Published: May. 15, 2026 7:10 p.m. GMT+8

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After Zhuhai sold its economy’s crown jewel, Gree Electric, the state-capital binge that followed produced immense debt and a string of troubled acquisitions.

A widening corruption probe in the southern Chinese manufacturing city of Zhuhai is casting new scrutiny on how local officials and state-owned companies deployed billions of yuan after selling control of one of China’s most valuable home-appliance makers.

The probe made headlines with the announcement that former Zhuhai Gree Group Co. Ltd. Chairman Zhou Lewei was under a corruption investigation and had turned himself in, according to an April 28 statement by Guangdong’s graft watchdog.

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Zhuhai corruption probe targets ex-Gree Group Chairman Zhou Lewei and officials over 41.66 billion yuan from 2019 sale of 15% Gree Electric stake.
Gree Group expanded via acquisitions, 63 funds (27 billion yuan committed), but debt rose to 61.3 billion yuan amid losses in targets like Bauing.
City now consolidates assets into Zhuhai Technology Industry Group, sells troubled holdings, retreats from post-Gree expansions.

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1. A corruption probe in Zhuhai, China, scrutinizes how officials and state-owned firms used billions from selling a 15% stake in Gree Electric Appliances (000651.SZ) in 2019 for 41.66 billion yuan ($6.1 billion) to Hillhouse Capital-led consortium [para. 1][para. 5][para. 6].

2. Former Gree Group Chairman Zhou Lewei turned himself in for corruption on April 28, as announced by Guangdong’s graft watchdog; he led during Gree Electric's restructuring [para. 2][para. 3].

3. Investigations follow falls of ex-Zhuhai party chief Guo Yonghang and state assets directors Li Wenji (late March) and Li Congshan (July 2024) [para. 4].

4. Post-sale, Gree Group, once 71.8% of Zhuhai SOE revenue and 61.6% profit in 2018, expanded into acquisitions, funds, and parks targeting pillar industries like IT and biotech, but racked up debt from 2.3 billion yuan (2019) to 61.3 billion yuan (March 2025) [para. 10][para. 17][para. 18][para. 22].

5. Zhou took over Gree Group in 2016 after Dong Mingzhu; Guo pushed reforms, Li Congshan (from Jan 2019) justified sale citing Gree's adaptation issues and aimed to leverage proceeds for over 100 billion yuan [para. 11][para. 12][para. 14][para. 16].

6. Early buys: Changyuan (600525.SH), Zhuhai Aerospace (300053.SZ), Comix (002301.SZ) for ~3 billion yuan; by March 2025, 63 funds worth 131.5 billion yuan with 27 billion committed [para. 19][para. 20].

7. Goal: Attract firms via state credit, but many deals mistimed, targeting troubled assets [para. 8][para. 21].

8. Key flop: Zhuhai Airport City (under Li Wenji from Aug 2019) bought 22% of Bauing (002047.SZ), Evergrande supplier (42.7% revenue in 2019), for 1.62 billion yuan plus more to 2.3 billion; Bauing hit 5.57 billion yuan losses (2021-2024), credit impairments 3.82 billion (2020-2023), delisting risk post-2024 negative net assets [para. 24][para. 25][para. 26][para. 28][para. 29][para. 30].

9. Zhuhai controls >12 listed firms by April 2026 across sectors; many acquired 2020-2021 via transfers, with issues like Tongyu Heavy (300185.SZ) high receivables, Jianyi (002789.SZ) 982 million yuan loss in 2021 [para. 33][para. 34][para. 35].

10. Gree investment arm lost 238 million yuan on 35.6 billion assets (2024); profits from Hengqin Financial (203 million profit 2024, transferred 2023) and 3.22% Gree Electric dividends; no new pillar [para. 36][para. 37][para. 38].

11. Since 2025, retreat: Sold Tongyu to Shandong Guohui (May); injected capital into Jianyi, waived 1.4 billion debt + interest, donated 400 million yuan [para. 40][para. 41][para. 42].

12. New Zhuhai Technology Industry Group (May 2025, Gree 40%, Huafa 60%); Gree injecting 55.7 billion yuan assets (funds, parks), cutting consolidated assets by 58.4 billion yuan per YY; retains Gree stake, Hengqin [para. 43][para. 44][para. 45][para. 46][para. 47].

13. Aims to cut competition, concentrate assets/liabilities [para. 48]. (498 words)

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