Chinese businessman behind $40 billion Nicaragua canal denies special ties

BEIJING Wed Jun 26, 2013 10:39am EDT

Wang Jing, HKND Group chairman, listens to a question at a news conference in Beijing, June 25, 2013. REUTERS/Jason Lee

Wang Jing, HKND Group chairman, listens to a question at a news conference in Beijing, June 25, 2013.

Credit: Reuters/Jason Lee

BEIJING (Reuters) - The mysterious Chinese businessman behind a $40 billion plan to build a canal through Nicaragua pledged transparency on Tuesday - but refused to reveal where he attended college.

Wang Jing, 40, who says his initial wealth came from a gold mine investment in Cambodia, is the only public face for a project that on paper would challenge the Panama Canal's monopoly on shipping oil, ore and containers between Atlantic and Gulf of Mexico ports and Asian markets via Central America.

Nicaragua's Congress last week granted Wang's Cayman Islands-registered HKND company a 50-year concession to develop the canal, following a September agreement with president Daniel Ortega. HKND in turn is a unit of HK Nicaragua Canal Development Investment Co., Ltd, a firm Wang had registered in Hong Kong just a month before the deal with Ortega.

Wang denied any family connection to the Chinese government, military or ruling Communist Party. Connections, or guanxi, are often the hidden ingredient behind sudden success in China.

"I always hoped people would pay attention to the project and not to me personally," he told a news conference at a luxury hotel in central Beijing.

"I am a very normal Chinese citizen. I couldn't be more normal."

The plan - which has generated a lot of skepticism from industry experts - is to build a 286-km (178-mile) canal connecting the Caribbean with the Pacific via Lake Nicaragua, Central America's largest freshwater lake.

It would cost about four years' worth of Nicaragua's annual gross domestic product, and would likely be three times longer than the Panama Canal, which took a decade to build.

Speaking later in an interview with Reuters, Wang said HKND would head a consortium of partners that would operate "fairly, impartially and openly" and might include international firms.

It would be financed by large Chinese and international banks that he declined to name, although he said financing negotiations were going smoothly.

A likely partner is China Railway Construction (1186.HK), one of the country's largest state-owned infrastructure developers, according to HKND materials promoting the project. Another of Wang's companies, the unlisted Xinwei Telecom Enterprise Group, signed a cooperation accord with China Railway earlier this year.

On one point, Wang was explicit - although his share in HKND might drop, he would remain in charge. He owns 100 percent of HKND.

"Any future partners or consortium will respect my views and opinions very much," he said.

Wang projected annual shipping revenues of $5.5 billion when the canal is at full capacity. The deal calls for construction to be completed in five years, but contains no penalties for delay. Once constructed, ownership of the concession would gradually return to Nicaragua.

The tall, round-faced Wang was unknown when he privatized loss-making state-owned Xinwei in 2010 and transformed it. Xinwei booked over 2 billion yuan ($325.46 million) in profits last year, Chinese media reported, mostly building wireless networks in other countries.

Xinwei's website carries photographs of Xi Jinping, now China's president, and Li Keqiang, now premier, visiting Xinwei.

Wang told journalists he studied traditional Chinese medicine, but added it was "inconvenient" to say at which university. He then took an interest in mining in Southeast Asia, including the Cambodian gold mine, he said.

Wang said he lived in his native Beijing with his mother, younger brother and daughter. Corporate records show a hotel management company registered to Wang and his brother, Wang Peng, as well as other small entertainment and telecommunications companies under their names.

Reuters was not able to locate the hotel management company at its registered address.

Wang's nearly 40 percent stake in Xinwei is worth about $1 billion, based on the asking price for a minority share in the firm currently on sale by state-owned Datang Telecommunications.

(This version of story corrects to remove reference to amount of Wang's eventual shareholding, adds line to clarify that shareholding might drop in paragraph twelfth)

(Additional reporting by Koh Gui Qing, Editing by Dean Yates)

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