Business Intelligence Online
The 39-year-old orchid and property magnate is under house
arrest in China with South Korean media reporting he will be sacked as the
head of North Korea's Shinuiju City economic enclave.
Yang's assistants refused to comment on the reports,
telling CNN they had been instructed by police not to talk to the media.
Chinese officials also would not comment on any sacking,
instead confirming the tycoon was under house arrest in the northeastern
city of Shenyang on suspicion of "involvement in various illegal
activities."
However, the officials were quick to point out that China
was not against the establishment of the economic region on the North
Korean-Chinese border.
If the reports prove to be true, Yang's sacking would
question the idea of creating the enclave and possibly sends it back to
square one.
Observers say both countries are keeping the situation
under control through diplomatic channels and may be trying to finesse the
crisis by dismissing Yang and replacing him with someone acceptable to both
Beijing and Pyongyang.
Spotlight
The economic enclave was to have been built and ruled by
Yang with the blessing of North Korean leader Kim Jong Il.
North Korean officials say the region is being created
with the intention of allowing unfettered capitalism to lure international
investors.
Yang, a Dutch citizen born in China and reported to be the
country's second richest man, hit the headlines last month when he was named
chief executive of the enclave.
He has been in the spotlight ever since.
Last Thursday, a day before his arrest, Yang said he was
being asked by Shenyang's provincial tax bureau to pay 20 million yuan ($1.2
million) in taxes by October 12.
At that time, he said the situation is being worked out
and is not a big problem.
But the saga didn't end there.
More trouble
Yang's Hong Kong listed flower-growing company Euro Asia
is also in trouble.
The shares were suspended from trading on September 30 and
on Wednesday, Hong Kong newspaper The Standard reported the company is being
investigated for allegedly inflating sales figures by 21 times over four
years, and that accountants Arthur Andersen failed to spot any
irregularities.
Hong Kong's Securities and Futures Commission would not
comment on the report but told CNN, "... if we believe there is
suspicious activity we will follow up."
It is difficult to predict what is next for Yang.
"I don't think Yang Bin's future is very good,"
Business Week's Asia Correspondent, Mark Clifford, told CNN.
"At the very least he's going to pay a lot of money
in back taxes. His company looks like it's, if not ruined, at least on the
edge of collapse. It's shares are down 80 to 90 percent from their peak
earlier this year. He's no longer China's second richest man, as he's been
billed. I think he'll be lucky to stay out of jail."
Yang may have also worn out his welcome in China, with
diplomatic sources quoted as saying the Dutch passport holder may be
deported.
Equally unclear is the fate of North Korea's bold
experiment with capitalism, or its recent, unprecedented flurry of
diplomatic activity. -- CNN
Correspondent Lisa
Barron and CNN
Beijing Bureau Chief Jaime
FlorCruz contributed to this report 9 October 2002
HONG KONG - Chinese authorities released Yang Bin, head of
North Korea's Sinuiju Special Administrative Region, Saturday and put him
under house arrest, informed sources said.
In a telephone interview with Yonhap News Agency, a source
said that Chinese authorities released Yang Bin around 5 p.m., less than 24
hours from his detention the previous day.
In releasing Yang, the authorities considered his
"special status" (as a senior diplomat of North Korea), the source
said, adding that Yang will not be permitted to leave Shenyang for the time
being.
Another source, who would not like to be identified,
confirmed that Yang Bin was under a house arrest.
Officials of the Euro-Asia Group which Yang bin owns,
however, would not confirm whether Yang was released or not.
An official said that he understood that Yang Bin was put
under arrest by security authorities of the Shenyang City government, not
the national government authorities.
Security officials of the Shenyang City government were
told not to talk anything about Yang Bin's arrest, sources said. - (Yonhap)
Yahoo! Asia Pulse
7 Oct 2002
BEIJING - Tycoon Yang Bin, the newly-appointed governor of
North Korea's new capitalist enclave, was detained yesterday by China for
alleged financial irregularities, a development that could upset Pyongyang's
economic reform plans.
The detention was seen by some analysts as a sign of
China's anger that Pyongyang had appointed the Shenyang-based businessman
governor of Sinuiju without first discussing its decision with Beijing.
Mr Yang, the 39-year-old agricultural entrepreneur who was
born in China but has Dutch nationality, was arrested at 5 am yesterday in
Shenyang, South Korea's Yonhap News Agency said.
The Chinese authorities did not give a reason for the
arrest but diplomatic sources in Beijing told Yonhap that it was related to
tax evasion, stock speculation and illegal real-estate development.
The Shenyang police and the Chinese Foreign Ministry would
not confirm the arrest when contacted by The Straits Times.
Calls to Mr Yang's Euro-Asia Group in Shenyang and his
holdings company in Hongkong as well as the Shenyang tax authorities also
drew a blank.
Later yesterday, a report by the official China News
Service said: 'According to our understanding, ethnic Chinese Dutch citizen
Yang Bin was taken in for questioning by local police at five this morning
because of suspected illegal activities.'
The Shenyang authorities had 'opened a legal file and
decided to put him under house arrest', the news agency said on its website.
Earlier this week, Shenyang tax officials ordered Mr
Yang's company to pay back overdue taxes, Chinese state media reported.
Mr Yang has admitted that he owes 10 million yuan (S$2.2
million) in back taxes to Shenyang.
The case threatens to upset North Korea's plans to
replicate China's special economic zones (SEZs) in Sinuiju, just across the
Yalu River from Dandong in Liaoning province.
North Korean paramount leader Kim Jong Il had been
enthralled with the success of China's SEZs and Shanghai's Pudong New
District on two trips to China.
On Sept 12, Pyongyang set up the Sinuiju Special
Administrative Region and installed Mr Yang, named China's second richest
man by Forbes magazine, as its head last week.
Commenting on Mr Yang's detention, a European diplomat and
regular traveller to North Korea said that the Chinese were probably miffed
for not having been informed of Pyongyang's decision-making process for
Sinuiju.
Speaking on condition of anonymity, he said the move could
hurt Beijing-Pyongyang relations.
'It's a shot in the head to the North Koreans and puts a
bad patina on Sinuiju. It certainly sets the project back quite a bit,' he
said.
He also saw Mr Yang's detention as 'a huge embarrassment'
for the North Koreans, saying they evidently did not exercise due diligence
in choosing the right person to run their most ambitious plan to introduce
capitalism.
But another likely reason for the detention could be a
conflict of priorities between the Shenyang authorities and the central
government, the diplomat said.
The Shenyang tax authorities might be keen to nab a 'big
fish', without giving due regard to the Chinese Foreign Ministry's concerns
about relations with North Korea. -
Straits
Times 5 October 2002
SEOUL - Scepticism was mounting in South Korea yesterday
over the credibility of Chinese-born Dutch tycoon Yang Bin who was appointed
to run a capitalist enclave in North Korea.
Last Friday, the 39-year-old businessman declared that all
foreigners, including South Koreans, could cross the Yalu River from China
to the Sinuiju Special Administrative Region freely without visas from
Monday onwards.
But this promise never materialised, and foreign and South
Korean journalists seeking to enter the region were turned away by both
Chinese and North Korean authorities on Monday.
When reporters massed at his company's headquarters
seeking permission to enter, Mr Yang said the hardline government would not
let foreign visitors inspect the place without visas until it is walled off
from the rest of the insular nation.
'You guys should give me some more time,' he told foreign
reporters yesterday at a news conference at the headquarters of his company
Euro-Asia Agricultural Holdings Co, in the north-eastern Chinese city of
Shenyang.
'You've been waiting 50 years. You can give me a few more
days.
'The main reason is because there is no wall now,' he
added.
Mr Yang, a colourful figure who made his fortune exporting
orchids, has been handpicked by North Korean leader Kim Jong Il to introduce
a dose of capitalism to North Korea's border region with China.
At an earlier press conference in Shenyang on Monday, he
apologised for the hitch, saying that the new rule will instead take effect
on Oct 8.--AFP, AP Straits
Times 2
October 2002
HONG KONG (Reuters) - One of China's richest businessmen
has been selected to lead a new, capitalist-style special administrative
region in communist North Korea, the South China Morning Post reported on
Tuesday.
Yang Bin, 39, told a news conference in the North Korean
capital Pyongyang on Monday that he would be chief executive of the special
financial and commercial zone of Sinuiju, on the border with China, the Post
said.
The landmark free trade zone, to be built in the
northwestern corner of the country, would have its own legislature, more
than half of whom will be foreigners, and its own courts with a European as
chief judge, Yang was quoted as saying.
A wall will be erected to divide the capitalist region
from the rest of the reclusive country and some 500,000 people living in the
area will be forced to move to other parts of North Korea over the next two
years.
Yang said 200,000 migrants would be brought in, including
young and skilled people from North Korea and China.
North Korea said last week that it wanted to turn the
region, now a poor agricultural and industrial area which reportedly lacks
even clean water, into an international financial, industrial and tourist
centre. It appears to be using booming special regions in China as a model.
The main businesses in the zone will be industry, finance
and processing and U.S. dollars will be used as its currency. Gambling will
also be permitted, likely in hopes of attracting hordes of punters and cash
from China, where casinos are illegal.
Yang, a former Chinese navy officer, was educated in the
Netherlands and holds Dutch citizenship. He was named by Forbes magazine as
the second richest businessman in China last year, with estimated personal
wealth of US$900 million.
Some analysts and foreign businessmen were surprised by
Yang's announcement that he would run the special economic zone, noting
North Korea has always been highly suspicious of foreigners, the Post said.
Yang had been investing in North Korea for only two years,
and did not speak Korean, it added.
"Perhaps Kim (North Korean leader Kim Jong-il) wants
to leave space between himself and Yang. If the zone succeeds, it will be
good for everyone. If it fails, then he can blame the foreigners," the
Post quoted a European businessman as saying.
Yang told reporters he had been selected because he had
helped North Korea develop agricultural projects. Drought and other
disasters have ravaged the country since 1995 with the death toll estimated
at 100,000 to several million.
The Post said Yang underscored his lack of experience as a
political leader by saying: "I am a specialist in agriculture, not
politics."
YANG NO STRANGER TO CONTROVERSY
The zone would have no import or export tariffs and a 14
percent income tax rate. It will be visa-free to everyone except North
Koreans.
North Korea's leader toured Shanghai, China's economic
hub, in early 2001. His Chinese hosts later quoted him as saying he had been
strongly impressed by the city's dynamism.
China's economic boom began two decades ago in Shenzhen, a
special economic zone near Hong Kong. Shenzhen acted as a magnet for badly
needed foreign capital and management expertise.
Yang is chairman of Euro-Asia Agriculture (Holdings) and
holds a 54 percent stake in the firm, which grows and exports orchids from
China. The Post quoted him as saying he would not step down in the short
term but might do so at a later date.
Yang was quoted as saying the North Korean government
would build 10,000 greenhouses to produce vegetables for export to Russia
and Japan. Sales would be handled by Euro-Asia, he said, adding the business
would command a high profit margin.
Euro-Asia's shares have plunged more than 70 percent in
the last three months as the company's financial practices and Yang's
personal finances came under intense media scrutiny.
The Hong Kong Securities and Futures Commission ordered
the suspension of Euro-Asia's shares on Thursday for failing to disclose
price-sensitive information.
Market sources told Reuters on Friday that the chief
executive officer of the company, Chen Jun, had resigned. Neither the
company nor Chen were immediately available for comment.
In July, Yang said his company had been probed by mainland
tax authorities but added it was a routine investigation.
- 24 Sept 2002 Yahoo!
Asia
Yang Bin, reputedly China's second-richest man, meets the
media at the JW Marriott Hotel in Hong Kong on Sunday after claims last week
that he had disappeared sent shares in his firm tumbling. The chairman of
Euro-Asia Agricultural (Holdings) chided the media for what he said was
irresponsible reporting.
- PIcture by Oliver Tsang
South
China Morning Post 16
July 2002
