Zijin Mining to take 9.9% stake in Montage Gold
As part of the deal, the Lundin Family Trust also agreed increase its stake in the company from 17.7% to 19.9%.
The story of disgraced former senior Chinese leader Bo Xilai may be the most well-known, but further down the political and business scales the position of China’s superwealthy can be just as precarious.
A prime example is billionaire chairman of mining group Hanlong, Liu Han who after going missing for more than a year is now accused of running a “mafia-style” gang involved in gambling, gun-running, stock manipulation and predatory lending among other criminal activities in his home province of Sichuan.
The curious case of Liu, who is only 46 years old and founded the conglomerate in 1997, also highlights the dangers faced by Western firms trying to do business with Chinese magnates.
Sichuan-based Hanlong pursued a number of international mining deals which have gone pearshaped including the $5 billion Mbalam iron ore project straddling Cameroon and Congo-Brazzaville in Central Africa with Australia’s Sundance Resources (ASX:SDL), a deal to develop an iron ore and copper-molybdenum mine with Moly Mines (ASX:MOL) in the Pilbara and another molybdenum project with US-based General Moly (NYSE:GMO), of which it owned 25%.
Analysts saying Liu may have found himself on the wrong side of China’s new leadership under Xi Jinping who have focused their energy on Sichuan in search of another big scalp in their anti-corruption drive.
Zhou Yongkang, the powerful former domestic security and energy tsar is now also being investigated for graft alongside other Sichuan-based communist part big wigs including a former state enterprise regulator and public security vice-minister.
“Liu Han became widely connected to government officials in his search for an ever-more powerful ‘umbrella’,” according to state-run Xinhua news agency which reported that “the news of the prosecutions has sent tremors through Sichuan’s political and business circles.”
The Communist Party’s People’s Daily reported that officials who sheltered Lui will be hunted down because he “would not have been able to get away with his crimes if he had not enjoyed the protection of “certain party, government and legal bodies.”
At the time of his disappearance, the influential Chinese business magazine Caijing speculated that Liu may have helped wealthy Chinese to move money out of the country ahead of the leadership transition.
Image of Liu and Cameroon President Paul Biya July 2011: Sichuan Hanlong Group.
