Ortegas’ Chinese partner kicked out of the Shanghai Stock Exchange

Daniel Ortegas’ partner in the failure of the canal project has since lost nearly $ 29.5 billion.

By Ivan Olivares (Confidential)

HAVANA TIMES Chinese tycoon Wang Jings’ participation in the Chinese stock exchange has ended. His company, Beijing Xinwei Technology Group Co., also known as Xinwei Group, was delisted, along with the businessman who ran it.

Wang Jin, a hitherto unknown tycoon, became a household name in Nicaragua in 2013, when Daniel Ortega announced his intention to award Wang a concession to build an interoceanic canal through Nicaragua. The estimated initial cost of the project was $ 40 billion, later raised to $ 50 billion. In his initial presentation, Ortega called the tycoon a ghost, a reference the Asian tycoon then made real, later disappearing after breaking one of his promises.

The Epoch Times, a New York-based international media company focused on China, documented the tycoons’ many deals and the sanctions imposed when its bubble burst. The sanctions included delisting the company’s shares and banning Wang from holding a management position in listed companies for 10 years, they reported.

As a result of the sanctions, Xinwei Group’s share price fell $ 2.3 billion into the red, creating significant financial turmoil for more than 100,000 of its shareholders, the Epoch Times report said. .

This was not the first time that Wang Jing suffered multibillion dollar losses on the stock market. In October 2015, following a widespread plunge in the Asian stock market, the tycoon lost more than $ 9.1 billion, or 89.2% of his reported holdings of $ 10.2 billion.

Continuing its erratic stock market behavior, in June 2017 the company paid dividends of 0.009 Chinese renminbi (just over one tenth of a US cent).

At the start of the second half of 2019, Xinwei Group trading was canceled after more than 900 days of suspension. After fall for 36 consecutive days, the company set a record for back-to-back A-share losses, with an evaporating market value of nearly $ 29.5 billion, reporter Julia Ye noted in The Epoch Times. This affected more than 150,000 shareholders.

According to a report from the Shanghai Stock Exchange to which Confidencial had access, that year Xinwei suffered the fourth largest losses of any company listed on that exchange. At the end of 2018, its shares were listed at 14.59 renminbi (around US $ 2.18). Exactly one year later, the stock’s price was 3.06 renminbi (0.45 cents US), a loss of 79.03% of its value. This led the Shanghai Stock Exchange to include the company on a list of those at risk of delisting in 2019, as actually happened later.

In March 2020, when the Chinese tycoon had long disappeared from sight in Nicaragua, the markets echoed another disaster in Wang Jing’s trade relationship. The value of his shares fell another 45.8%, leaving his face value even smaller.

Mysterious transactions and lack of transparency

News articles show how Wang Jing capitalized on the initial expectations raised by the Interoceanic Canal project. While in Nicaragua, rural residents whose lands were under threat organized and led around 100 different protest marches against the project, Wang Jing used the project to attract investors and seashells. In September 2013, he raised $ 4.2 billion, which he leveraged over the next two years to increase the market value of his business to over $ 31 billion. That year, his company was included in the exclusive SSE 50 index.

This development has greatly benefited Wang. According to Forbes China, he owned more than a billion shares of Xinwei Group, valued at $ 6.6 billion in 2014. This makes him one of China’s top billionaires. The Epoch Times notes that the Xinwei Group has enabled three more Chinese investors to become billionaires.

The Xinwei Group’s initial appeal will eventually evaporate due to its weakness, mysterious relationships and lack of transparency, the article continues, summarizing some of the reasons that led to the company’s delisting, after that Wang took over the chairmanship of the Xinwei group.

Wang claimed the company turned a loss into a profit of $ 88.4 million due to a large order of $ 466 million from Cambodia. But a 2016 NetEase Finance investigation report () said Wang’s report was fraudulent. The profits he reported were based on an illusion created by the Xinwei Group and its subsidiary, Cambodia Xinwei, the article reports.

Investigation data indicated that Cambodia subsidiary Xinwei had agreed to order US $ 466 million worth of products from parent company Xinwei Group. The Wangs company then used this order to obtain a $ 466 million loan from the Development Bank of China. This same money was then used by the Cambodian subsidiary to finance its order from the Xinwei group. This circular mechanism was similar to that used by the company to expand its operations in Ukraine, Tanzania, Nicaragua and other countries.

With the fame and resources he gained, Wang embarked on other international megaprojects. These, like the Nicaraguan Canal, never materialized. Among them was Beijing Skyrizon Aviation, a company which was later sanctioned by the United States when it attempted to acquire a Ukrainian aircraft engine company. He was also involved in a project to build a deep-water port in Crimea.

Other plans for the tycoon included the acquisition of an Israeli satellite company and involvement in international security operations. Finally, he attempted to create an aerial and space information network that would involve more than thirty satellites to form a global communication system. These searing projects and dreams got the media and investors excited and helped the company secure new loans to pay off the old debt, The Epoch Times summarized.

Meanwhile, in Nicaragua, hopes for a canal have long faded. However, Law 840, the Canal Law, is still in force and calls for its repeal have been systematically ignored. Among other things, this law granted Wang jing exclusive rights to build and operate the canal, potentially for more than 100 years. Not only that, he authorizes the canal project to expropriate all the land along the canal path. Wang Jing’s phantom fortune may have imploded in Shanghai, but his shadow remains in Ortegas Nicaragua.

Read more about Nicaragua here in Havana Times.