(Bloomberg) -- Desmond Shum said he hadn’t heard a peep from his ex-wife, Whitney Duan, since she failed to show up at the unveiling of her luxurious Bulgari hotel in Beijing in 2017.
For four long years, Shum didn’t know where she was, or if she was even alive. She’d built a fortune cutting deals with Communist Party elites; Shum suspected she’d been held by government investigators. But after Shum wrote a memoir denouncing the system that could detain his ex-wife without consequence, he finally heard from her.
A few days before the book’s Sept. 7 release, Duan called with a message: If he published his manuscript, the consequences could be dire. She was on temporary release, she said. The charges against her were confidential, and she could be returned to custody at any moment.
But “Red Roulette,” Shum’s insider account of of business and politics in Xi Jinping’s China, was already in various stages of distribution. His story is particularly timely, as communist leaders have begun to reassert control over the private sector.
“At the moment, every private entrepreneur faces a huge question: where does Xi Jinping want to take China?” Shum said in a video call. “If you’re investing in China right now, you’re not playing a game that you understand. The game has changed completely.”
His vanished ex-wife, one of China’s longest-missing deal makers, is an extreme case of the pressure now facing the country’s rich and powerful. Jack Ma hid away for months after after the government dismantled his planned IPO following his criticism of outdated regulatory practices. Meituan’s Wang Xing was recently warned to stay out of the spotlight after making a controversial post on social media.
Shum reports that Duan lived by the motto, “If you pulled my corpse out of my coffin and whipped it, you’d still find no dirt.” At the same time, he isn’t shy about saying they operated in a crooked system and got rich doing it.
Duan made her career connecting political elites to economic opportunity. In one instance, she bought shares of Ping An Insurance, co-investing with relatives of former prime minister Wen Jiabao, and cashed out after gains in 2007, according to the book. The New York Times detailed her dealings with the Wen family, and particularly Wen’s wife, who had a penchant for diamonds, in 2012.
Shum and Duan’s wealth grew to include interests in real estate, such as the Beijing Airport City project, held through their group, Great Ocean. Duan was also involved in the purchase of a condo in a skinny skyscraper near Central Park at 432 Park Avenue; the unit is now facing foreclosure.
Shum documents the couple’s rise. He toured a $100 million yacht with Evergrande founder Hui Ka Yan. He recalled asking a young Ma for a business plan; the future Alibaba founder laughed at him.
Shum and his co-author, journalist John Pomfret, lean into the intrigue of Shum’s life among Beijing’s power brokers. He played high-stakes card games on a private jet. A naval officer proffered battleships to smuggle beer. The son-in-law of a party boss once told him that jail time had become almost a right of passage for business leaders, like going to the military academy.
Shum began to notice a pattern of ambitious executives going missing, starting with Li Peiying, the Beijing airport chief who also headed Shum’s joint venture airport project. Li, who made arrangements for China’s party heavyweights when they landed in Beijing, was found guilty of corruption and executed.
A former member of the CPPCC, China’s political advisory body, Shum said his views on China began to sour in 2008 when the party began to reestablish control over the economy, the media, the Internet and the educational system. Party committees were forced on private businesses, including his.
He says the system ultimately serves interests of China’s “princelings,” descendants of the original Communist revolutionaries. That group includes Xi, whose father was a senior party official under Mao Zedong and Deng Xiaoping. Harsh punishment, he says, is reserved for “commoners” without a revolutionary pedigree like Duan.
Now living in England with his 12-year-old son, Shum fears his ex-wife’s phone call is a sign that he and his family could still be vulnerable to retribution. He and Duan were willing players in the “roulette-like political environment of the New China,” he writes, not innocent bystanders.
Still, his tale is a rare alternative to China’s tightly-controlled, state-sponsored narratives. In his book, Shum poses an urgent question: “What type of system allows for extralegal kidnappings of the type that befell Whitney Duan?”
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