The recent turbulence in the interests of the princelings of the Chinese Communist Party and the arms trading giant Poly Group has raised concerns as they have been clearing the equity of two small financial institutions, experiencing a decline in the performance of their enterprises, seeing top executives fall from grace, and reportedly even having companies misusing the name and seal of “Poly.” Analysts believe that Poly Group is likely to be affected by the ongoing military crackdown within the party.
On August 12th, Poly Group issued a statement revealing the discovery of counterfeit seals of the company being used by individuals to impersonate Poly Group under the registered company “China Poly Chuang Ke Co., Ltd.” in Hong Kong, for the purpose of investing and setting up companies within China under false pretenses. The statement specifically mentioned five companies with “Zhong Bao” in their names, with four located in Shanghai and one in Jiangxi.
Poly Group stated that these companies and their subsidiaries and offices are not affiliated with Poly Group or its subsidiaries, nor do they have any relationship in terms of investment, cooperation, or business operations.
Poly Group’s official website reveals that the conglomerate is a large central state-owned enterprise established with the approval of the State Council of the CCP and the Central Military Commission. Its business scope encompasses trade, real estate, culture, technology, engineering, among other industries, and it holds controlling stakes in five listed companies both domestically and internationally. As of now, Poly Group’s total assets have surpassed 1.79 trillion yuan (approximately $250 billion USD).
Originally established by the CCP for military equipment exports, Poly Group has been engaged in international trade of weapons and military equipment for many years, drawing widespread attention from the international community.
Regarding Poly’s recent statement, Li Yanming, a current affairs commentator living in the United States, expressed to Epoch Times on August 15th that for a military weaponry enterprise with Poly’s background, who in China would dare to counterfeit its seal and operate openly under its name? The events behind this incident likely involve internal elements within Poly. Particularly noteworthy is that the companies were established in Hong Kong, Shanghai, and Jiangxi, all of which hold significance within the Jiang-Zeng (Jiang Zemin and Zeng Qinghong) faction.
Poly Group has also recently divested the equity of two small financial institutions.
On August 12th, 1.7057 million shares of Panzhihua Rural Commercial Bank Co., Ltd. were listed for transfer on the Beijing Property Exchange, with a base price of 2.32 million yuan (approximately $325,000 USD), with China Poly Group Co., Ltd.’s subsidiary, Zhong Si Tian Cheng (Panzhihua) Silk Co., Ltd., being the transferor. The equity transfer was approved by Poly Group in a shareholders’ meeting on July 12th.
Looking at the equity structure of Panzhihua Rural Commercial Bank, the proportion of the equity transfer by Zhong Si Tian Cheng matches the ownership proportion. Therefore, if the equity transfer is successful, Zhong Si Tian Cheng will no longer hold equity in Panzhihua Rural Commercial Bank.
On August 7th, the Guangzhou Property Exchange disclosed that two wholly-owned subsidiaries of Poly Group, Poly Southern Group Co., Ltd., and Poly Investment Holdings Co., Ltd. simultaneously listed the equity of Guangzhou Poly Microloan Co., Ltd. for transfer, with a total of 200 million shares, representing 100% of the total shares, with a base price of 281.389 million yuan (approximately $39.4 million USD).
According to the announcement, Poly Group approved the transfer of Poly Microloan’s equity by the two subsidiaries in July this year, specifically on July 3rd.
According to the website of the CCP Central Discipline Inspection Commission on July 12th, Jiang Yingchun, a member of the Poly Group Party Committee and former Party Secretary and General Manager of Poly Culture Group, is under scrutiny and investigation.
Public records show that the 55-year-old Jiang Yingchun, who since 2001 had served as Assistant General Manager of Poly Culture, held positions as Party Secretary, Director, and General Manager of Poly Culture, as well as Chairman of Beijing Poly Theatre Management Co., Ltd., Beijing Poly International Auction Co., Ltd., Poly Hong Kong Auction Co., Ltd., and Poly Film Investment Co., Ltd., among other roles. In 2019, Jiang Yingchun was recognized by the CCP as a so-called “model of central enterprises”.
The real estate enterprise under Poly Group has seen a significant decrease in performance.
On April 29, Poly Real Estate Group announced on the Hong Kong Stock Exchange that its wholly-owned subsidiary, Poly (Shanghai) Real Estate Group Co., Ltd., recorded an operating income of 2.131 billion yuan (approximately $300 million USD) in the first quarter of this year, a decrease of 73.84% compared to the same period last year when the operating income was 8.145 billion yuan (approximately $1.14 billion USD). The net loss attributable to the parent company owner was 208 million yuan (approximately $30 million USD), whereas in the same period last year, there was a net profit of 546 million yuan (approximately $80 million USD).
It is said that this is the first time in four years that Poly Real Estate (Shanghai) has reported a loss in the first quarter.
Poly Development Holdings Group, a brother company of Poly Real Estate, saw its net profit drop by over thirty percent last year.
On January 19, Poly Development released its financial report. The data showed that the company achieved a total operating income of 347.147 billion yuan (approximately $48.6 billion USD) last year, a 23.49% year-on-year increase; the net profit attributable to shareholders of the listed company was about 12.036 billion yuan (approximately $1.7 billion USD), a decrease of 34.42% compared to the previous year. In other words, there was increased revenue but decreased profits.
Poly Development is currently the largest real estate developer in China, with the highest total sales last year. However, despite this, the peak stock price of Poly Development in August last year was 14.50 yuan per share (approximately $2.03 USD), whereas on August 14 this year, the closing price dropped to 8.16 yuan per share (approximately $1.14 USD), a decrease of 44%.
The predecessor of Poly Group was Poly Technologies Co., Ltd., established in 1983, with founders including Deng Xiaoping’s son-in-law He Ping and Wang Jun, the son of former Chinese Vice Chairman of the CCP, Wang Zhen.
According to the memoirs of Luo Yuxin, son of the CCP “General” Luo Ruiqing, titled “Farewell to the General Staff,” profits from arms trading exceed that of printing banknotes and drug trafficking. Billions of dollars in arms deals are conducted without any oversight, allowing the princelings to squander wealth.
Poly Group has attracted the offspring of top figures within various CCP factions. After Deng Xiaoping’s passing, the powerful families of the Jiang Zemin faction gradually took over and controlled Poly Group. Chen Hongsheng, son of Chen Zhengren, Jiangxi compatriot of Jiang Zemin and former CCP Secretary of Jiangxi Province, served as Deputy General Manager, General Manager, and Chairman of Poly Group from 1998 to 2013. Furthermore, Jiang Zemin’s three younger siblings, Jiang Qingyang, Jiang Qingyuan, and Jiang Haisheng, are all CCP colonels holding important positions within the military.
There have been longstanding rumors that Xi Jinping intends to shake up Poly Group. Li Yanming stated that the arms deals of Poly are closely linked to the corrupt activities within the CCP military. Since last year, Xi Jinping has been cracking down extensively on the Rocket Force and the General Armament Department, and with Poly facing numerous issues, it is highly likely that the company has been implicated. Additionally, the fall of high-ranking officials within Poly Group and the successive changes occurring within the company during the sensitive periods from the Third Plenum to the Beidaihe Conference reflect the intense infighting and turbulent currents within the top echelons of the CCP.