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Chongqing's Missing Entrepreneur
Summary:From hidden investments in major suppliers to property investments, an investigation into the business interests of a

By Zhang Xiaohui (张晓晖), Du Yuan (杜远), Xu Weiming (许伟明), Qiu Ziming (仇子明), Hu Zhongbin (胡中彬) and Zhou Hemian (周禾眠)
Corporation, Page 25
Issue 573
June 18, 2012
Translated by Tang Xiangyang
Original article:

On May, 25, the Hong Kong listed NVC Lighting Holding Ltd. (雷士照明) - hereafter simply refered to as NVC Lighting - China's largest lighting equipment manufacturer, issued a formal statement announcing that Wu Changjiang (吴长江), who holds a controlling stake in the company, was resigning from his positions as CEO and Chairman of the company. The announcement also said that Wu had resigned from all his positions at the company's subsidiaries.

On May 28, NVC Lighting announced that Zhang Kaipeng (张开鹏) would replace Wu as CEO of the company and that Andrew Y Yan (阎焱) had been appointed as the company's new chairman.

Though he still holds about a 19 percent stake in NVC Lighting, Wu has disappeared from public view.  

His wife Wu Lian (吴恋) has also disappeared. His parents-in-law told the Economic Observer on June 13 that they had been unable to contact the couple for more than a month and that their child was being taken care of by an aunt in Chongqing.

On June 14, reporters from the EO visited the headquarters of one of the Chongqing subsidaries of NVC Lighting, but the company refused to comment on Wu's disappearance and were unwilling to arrange an interview with the former CEO.
Below, we piece together the business holdings of NVC Lighting in Chongqing.

Setting Up a Company to Supply NVC Lighting

Wu Changjiang was born in Chongqing in 1965 and built his business empire up from nothing.

In 2009, he decided to invest in an industrial park in Chongqing's Rongchang county. Local leaders, including Xia Zeliang (夏泽良), who has since been taken away for investigation, promised to provide preferential treatment to the company and also offered land to Wu.

In order to handle the development, Wu founded the Chongqing Enweixi Industrial Development Co. Ltd (恩纬西) - hereafter refered to as Enweixi. The company had two registered share holders, Liu Xiang (刘翔) and Wu's father-in-law Wu Xianming (吴宪明).

When the company was first registered, Wu Xianming held a 49.67 percent stake in Enweixi and Liu Xiang served as the company's legal representative.

The local government of Rongchang County offered Enweixi 46 acres of land. In return, Enweixi promised to invest 500 million yuan in the local industrial zone.

Though not a subsidiary of NVC Lighting, Enweixi plans to construct an industrial park on NVC Lighting's behalf. The new industrial park would include areas devoted to the manufacture of outdoor lighting, residential lighting, commercial lighting and other projects.

In March 2010, just as NVC Lighting was preparing to list on the Hong Kong stock exchange, the registered capital of Enweixi was increased from the original 30 million yuan to 50.08 million.

In order to improve their cooperation with NVC Lighting, Enweixi began to expand their business scope and began to produce LED products, solar-powered lights and wind-solar lighting equipment.

In July 2011, Enweixi's legal representative was replaced firstly by Chen Jinlong (陈晋龙) and then again in October by Wang Shaoling (王邵灵), the head of systems research and development at NVC Lighting.

However, the notes of a meeting to discuss the re-allocation of Enweixi shares held on Oct 20, 2011 reveal that Wu Changjing was really in control of the company.

Though his father-in-law appeared as the largest shareholder on paper, in reality, he had no say in the company at all.

Wu Changjiang chaired the meeting. He decided to give 40 percent of the shares to Wu Xianming, 24 percent to Liu Xiang, 20 percent to Wang Shaoling and the remaining 16 percent was shared out among three other shareholders.

Enweixi was soon providing more and more goods to NVC Lighting,

On Feb 27, 2012 NVC Lighting announced that it was extending its commercial relationship with Enweixi, noting that it would become a contracted supplier producing outdoor lighting equipment for the company.

In the announcemnet, NVC Lighting noted that the contracts with Enweixi had reached $4.39 million in 2010 and $6.59 million in 2011, after the signing of this new contract, it was expected that business between the two companies would now be worth around $20 million in 2012, close to 140 million yuan.

However, the company failed to mention that high-level executives from NVC Lighting, such as Wang Shaoling, held large holdings of Enweixi shares. The official announcement also failed to note that Wu Changjiang was in control of Enweixi.

Wu Changjiang's Chongqing Connections

NVC Lighting has invested a lot in developing a manufacturing base in the Chongqing's Wanzhou (万州).

However most people are unaware that Wu Changjiang's wife has also founded a property company in the city - NVC Property (重庆雷士房地产开发有限公司).

Aside from Wu Lian who holds a 60 percent stake in the company, Li Shanjie (李善杰) from the Chongqing Enlin Electronics Corporation (重庆恩林) also has a stake in the property developer. Chongqing Enlin is another company that does business with NVC Lighting.

Wu Changjiang's mother-in-law, Chen Min, is also listed as a major shareholder in Chongqing Enlin.

Chen Min, who holds a 36 percent stake in Chongqing Enlin, told the EO that she knew nothing about the day-to-day operations of the company.

The remaining shares in the company are all held by high-level executives at NVC Lighting, though, Wu Changjiang is also said to be in effective control of the company.

Both NVC Property and Chongqing Enlin have gained support from the local government in Wanzhou. For instance, they've been offered offce buildings owned by the government at no charge.

NVC Property currently has two property projects underway in the city, one of which is a luxury villa development located on prime land.

When contacted by the EO, Wu Lian's parents refused to comment on their daughter's business activities in Chongqing. Wu Lian's mother said "I've been telling her for ages that she shouldn't have returned to Chongqing. What's so good about Chongqing? Now, when we try to call her mobile, it's always off. I don't know what has happened, I'm just so worried about her."

Wu Lian's parents also admitted that they never took an interest in Wu Changjiang's business. They just signed documents whenever they were asked to.

Requests for Interview Refused

It was not until NVC Lighting published an official "voluntary announcent" (PDF) that the public were aware that Wu Changjiang had disappeared.

A reporter from the visited the headquarters of NVC Lighting and requested an interview with Wu Changjiang, but was refused by the company. A spokesman for the company also refused to comment on Wu Changjiang's disappearance.

Since his disapperance, Wu Changjiang's Sina Weibo acount has continued to be updated.

The Chongqing Economic Times (重庆商报), claimed it had conducted an interview with Wu Changjiang. But a reporter from the paper later told the EO that he had only spoken to somebody on the phone claiming to be Wu and that he had no way of confirming whether the person he spoke to was Wu Changjiang or not.

The EO also requested interviews with the newly appointed Chairman of NVC Lighting Andrew Y Yan and the company's CFO, Tan Ying (谭鹰), but both requests were turned down.

Links and Sources
Economic Observer Online: Lighting Tycoon Rumored To Have Been Detained
Chongqing Economic Times: 吴长江:我被带走调查是谣言

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