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UPDATE 3-Bo's brother resigns from China Everbright board
April 26, 2012 / 12:30 AM / 5 years ago

UPDATE 3-Bo's brother resigns from China Everbright board

* Company says resignation to minimise “possible adverse impact”

* Everbright’s shares jump 5 percent in Hong Kong

* Bo Xilai’s downfall sparks biggest political crisis in two decades

* Family amassed wealth through network of businesses

By Sisi Tang and Kelvin Soh

HONG KONG, April 26 (Reuters) - The brother of ousted Chongqing party leader Bo Xilai, the main figure in a growing Chinese political scandal, resigned as vice chairman of China Everbright International Ltd, propelling its shares more than 5 percent higher on Thursday.

China Everbright moved to distance itself from the furore after Bo Xiyong stood down on Wednesday from a post he had held since 2003.

The resignation signalled widening scrutiny of Bo Xilai’s family connections as China’s leaders seek to contain the scandal ahead of this year’s transfer of power from President Hu Jintao to the next generation, likely to be led by Vice President Xi Jinping.

Bo Xiyong was using the name Li Xueming at Hong Kong’s Everbright, but various documents and local media record that Li and Bo Xiyong, Bo Xilai’s elder brother, are the same person.

The construction, water and waste investment holding company made no reference to Li’s relationship with Bo Xilai, but said the resignation was “to minimise any possible adverse impact on the company of certain reports recently published by the media on his family background”.

Bo Xilai, the son of Bo Yibo, a former Chinese vice premier and revolutionary who fought alongside Mao Zedong, was removed as party secretary of Chongqing in March, and stripped of his Politburo post in April.

He is being investigated for violating party discipline.

His wife, Gu Kailai, is under investigation for the murder of British businessman Neil Heywood. Chongqing police investigators believe Heywood was poisoned after he threatened to expose a plan by a Chinese leader’s wife to move money abroad, two sources with knowledge of the police investigation told Reuters earlier in April.

Bo’s downfall was precipitated by his former police chief, Wang Lijun, seeking refuge at the U.S. Consulate in Chengdu. Bo Xilai ran Chongqing and had clear ambitions to ascend to China’s top leadership later this year - the Communist Party’s nine-man Standing Committee.

Since then, details have begun to emerge about Bo and his family, prompting his son, the Oxford- and Harvard-educated Bo Guagua, to refute speculation about his private life and family.

Bo Guagua’s statement and Bo Xiyong’s resignation were the first reactions by any family members to the scandal since Bo Xilai’s ouster and the investigation into his wife.


The scandal sparked the biggest political crisis in two decades and abruptly ended Bo Xilai’s political ambitions for promotion at a critical Communist Party Congress later this year. He is under investigation for violating party discipline.

While Bo Xilai was concentrating on his political future, the wider Bo and Gu extended families amassed considerable wealth through a vast network of businesses inside and outside China, company registrations show.

Bo Xiyong, the former Everbright vice chairman, held some 10 million of the company’s shares, according to a corporate filing, which are valued at about HK$32.9 million ($4.2 million) based on the stock’s closing price on Tuesday.

Everbright’s shares, which are up about 24 percent so far this year, jumped as much as 5.8 percent on Thursday to HK$3.49, outpacing a 0.5 percent gain in the benchmark Hong Kong index .

“Investors came back to this stock as the resignation removed the overhang and it is a good thing for the company to cut ties from Bo,” said Alex Wong, a director at Hong Kong-based investment firm Ample Finance Group.

Bo Xiyong’s resignation would also allay any concerns among companies within China of doing business with Everbright if it sought to expand, Wong said.

Bo Xiyong also holds other directorships in Hong Kong-listed companies including property developer and investor HKC Holdings Ltd. HKC’s shares were down 2.5 percent in morning trade. He is also a director of Advanced Technology and Economic Development, corporate records show.

Bo Xiyong also has a residential address in Hong Kong’s upscale Robinson Road, corporate filings show.

During a recent visit by Reuters to the luxury complex, a security guard identified the name of Li as a man living on the 27th floor.

A woman in the apartment also shouted through a closed door that Li was not in Hong Kong, and declined to answer questions regarding her relationship with him.

Another Bo Xilai brother, Bo Xicheng, was previously an independent director in one of China’s biggest brokerages, Citic Securities, but stepped down from that position in 2006, corporate records show. Bo Xicheng is also listed as a shareholder and director of Far Eastern Industries (Holdings) Ltd, according to a 2011 company registry filing.

Their sister, Bo Jieying, has a $2 million house in Massachusetts, the Apple Daily reported on Thursday.

Besides his own direct relations, Bo Xilai’s wife Gu and her siblings also served as directors on a maze of companies.

Gu Kailai’s sisters Gu Wangning and Gu Wangjiang, are listed as directors of Hangang Worldwide, according to filings on the Hong Kong bourse.

Gu Wangjiang, who also goes by the name Kuk Mong Kong, is also listed as a director at Hong Kong Hitoro Holdings Ltd, which in turn holds a stake in Shenzhen-listed printing company Tungkong Security Printing Co. Ltd worth more than $100 million. That firm lists Gu Wangjiang, 64, as a director, company filings show.

Tungkong Security, which has total assets of roughly 1.3 billion yuan, has a market value of $385.8 million.

Several of the companies linked to Bo Xilai’s sisters-in-law list addresses in the British Virgin Islands.

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