Chinese private equity firm Nepoch Capital has cut connections with its co-founder He Jintao, son of the communist party’s former discipline chief He Guoqiang, after the princeling was said to be implicated in a corruption investigation, sources told Reuters.
The legal documents shown to investors by Nepoch’s underwriters have proved He (photo, left) was no longer involved with the firm, said a source who has seen the documents.
He was said to be questioned by authorities in May in connections with former China Resources chairman Song Lin. Song was sacked in April after journalist Wang Zhiwen publicly accused him of overpaying Shanxi Jinye Coal & Coking Group for coal mine acquisitions and laundering money through his mistress.
Founded by He in 2012, Nepoch become an investor in Alibaba Group Holdings thanks to He’s political connections.
“That deal showed us they really had the connections to land deals, and convinced us to invest in the fund,” said an investor source.
He and his younger brother He Jinlei, who was also said to be investigated for corruption, have both transferred assets to family members in the United States, according to Boxun news portal.
Children of China’s political elite are running a number of private equity firms, according to a Thomson Reuters report (pdf).
Among them are Alvin Jiang, or Jiang Zhicheng, the grandson of former President Jiang Zemin and a founding partner of Hong Kong-based Boyu Capital Consultancy, and Winston Wen, or Wen Yunsong, the son of former premier Wen Jiabao and co-founder of Beijing-based New Horizon Capital.
Sources: Reuters, Boxun (博讯网), International Business Times
Hui Zhi is the Senior Manager for Content with the China Compliance Digest, where a version of this post first appeared.