Steve Bannon, Kyle Bass, Andrea Yang, Guo Wengui and the War of the Chinese Billionaires
Chinese billionaires accused of corruption who flee China to live in exile in the United States are far from new, but none have been so vocal and at the center of US-China tensions as Gou Wengui, who, it was revealed July 9th, is under FBI investigation for his ties to Steve Bannon and his own self-funded media projects in the United States (1).
Few have benefited like Guo from the actions of high-ranking Republican officials like Bannon or public spokespeople like millionaire short-focused hedge fund manager Kyle Bass and anti-Chinese short analyst Anne Stevenson-Yang. Even fewer have been accused of using their connections to defame and attack their enemies like New York-based billionaire Bruno Wu, the founder of the Seven Stars Group which controls Nasdaq-listed Ideanomics (IDEX).
The effort made by Guo and his cast of enablers is astounding. Although he makes himself out to be an activist calling for corruption reform in China, the reality is Guo (who also goes by the names Guo Wen Gui, Guo Haoyun, Miles Guo, and Miles Kwok) fears he and his family will be extradited back to China where he could spend the rest of his life in a Chinese prison.
In his desperation Guo is waging a war on multiple fronts, including one with Bruno Wu that could easily be turned into a movie or novel. Guo has made numerous accusations of sexual misconduct, murder and child rape against Wu and his wife (Chinese media star Yang Lan) which resulted in a series of lawsuits. The war isn’t one-sided. In another sensational lawsuit Guo sued Roger Stone for $100 million for comments Stone made on InfoWars accusing Guo of being “a turncoat criminal who is convicted of crimes both here and in China”. Stone, who pled guilty, alleged he got the information from Wu via ex-Trump campaign staffer Sam Nunberg. (2)
This from Wu and wife Lan’s lawsuit against Gou filed in New York State Supreme Court:
“Plaintiff Wu, a prominent investor, media entrepreneur, and published author, and plaintiff Lan, a leading broadcast journalist and media entrepreneur, allege that defendant, a Chinese billionaire ‘in self-imposed’ exile in New York, believing that plaintiffs could negatively influence his ability to remain here, defamed them by stating in various formats that they engaged in criminal conduct, such as murdering and raping children, that Lan has sexually transmitted diseases, and that Lan has engaged in extra marital affairs to advance her career.”
The plaintiffs further state Guo had them under physical and electronic surveillance, had his son and bodyguards intimidate them at a London restaurant, threaten to physically harm Lan on YouTube and a website, and conspire with others to intentionally inflict emotional distress on them.
“His (Guo’s) revelatory claims of political corruption are little more than cheap and defamatory falsehoods about the personal lives of various Chinese and American citizens that Guo hopes to paint as antagonists of soap operatic proportions, and which he then feeds to his millions of followers,” the filing states. “Guo does not expose corruption; instead, he uses the Internet as an extension of his chaotic and criminal enterprise (3).”
In 2014 Guo’s net worth was $2.6 billion, which placed him 74th among China’s richest according to the Hurun Report (4). He is the developer of Pangu Plaza, a torch-shaped building close to Beijing’s Olympic Stadium. Guo’s fortunes started shifting in 2014 when he made a play for a minority stake in Founder Securities, China’s sixth-largest brokerage firm (5). In another crazy chain of events that generated much speculation about corrupt political influence, Li You, the head of Founder’s state-owned parent, was arrested on corruption charges, as was Ma Jian, a Guo ally and former vice-minister of state security.
In 2015 Guo’s political connections, business practices and ethics were described in a lengthy expose by Caixin Media, controlled by Ms. Hu Shuli (6). Caixin focused on Guo’s relationship with Ma Jian – Guo’s ally. The investigation generated headlines such as:
“Five Accused Tell Court That Fugitive Guo Wengui Was Mastermind Behind $60 Million Scheme” (7)
What is important to follow here is how he responded to the Caixin investigation. The following is from Hu’s statement filed with the State Supreme Court of New York, an action she took after repeated negative and intimidating tactics from Guo.
“Guo has repeatedly publicly published fabricated, false and offensive statements about Ms. Hu and Caixin on social media platforms such as Twitter and Facebook, asserting that Ms. Hu has, among other things, engaged in an extramarital affair, borne an illegitimate child, stolen user information, extorted opponents, abused drugs, caused her and her alleged partner to have to go to the emergency room for medical treatment, and abused her position at Caixin to further her allegedly illegal activities.” (8)
Guo fled China and settled in New York in late 2014 as the U.S. geopolitical relationship with China was souring. Guo starts a do-it-yourself campaign using Twitter, Facebook and the courts to go after enemies including Hu and Wu, who he blamed for providing information to the Chinese government about his business practices amongst other things, but after two years of conducting his campaign he had little success and his social media accounts were shut down or blocked and his lawsuits dismissed.
By this point the Chinese government was seeking Guo’s extradition from the US. He was at the mercy of the State Department and Justice Department but luckily for him there was internal conflict about returning him to China. Then-Attorney General Jeff Sessions threatened to resign if Guo was extradited (9) which put Sessions at odds with multiple senior officials including Secretary of State Rex Tillerson who were under intense pressure from Chinese officials.
According to a Politico source, casino magnate Steve Wynn hand delivered a letter from the Chinese government to Trump which requested Guo’s return (10). Trump, who initially seemed open to sending Guo back, ultimately demurred. Feeling that he was now safe Guo apparently accelerated his anti-Chinese dirt digging, presumably so he could curry favour and convince American officials to allow him to remain in the USA.
Bannon enters the scene shortly after leaving the Trump White House in 2017 when he takes a $150,000 loan from Guo (11). Bannon goes on to sign two $1 million contracts with Guo, the first in 2018 for introductions to media personalities and “advice on industry standards” and the second in 2019 to serve as senior editor of GNews, Guo’s China-bashing website.
The Bannon-Guo relationship strengthens and sees the two announce the Rule of Law Foundation (seeded with $100 million), whose purpose is to “unearth” evidence supporting the prosecutions of members of the Chinese elite – which of course included Wu (12).
It was Bannon who introduced Guo to hedge fund millionaire Kyle Bass, who is currently under SEC investigation for making false and misleading statements about United Development Funding (13), one of the companies Bass has a made a fortune from short selling. Bass went on to join the boards of the Rule of Law Foundation, GNews and G-TV, where quack theories like the COVID-19 virus being created in a Chinese laboratory were promoted (14).
Bannon also had an established relationship with anti-China analyst Anne Stevenson Yang, whose firm J Capital Is known for bashing Chinese led companies, sometimes with spectacularly bad results. Yang, who had been frequently interviewed by Bannon’s Breitbart, recently turned her attention to Bruno Wu-controlled Ideanomics (15). Yang published a negative research article that criticized the company’s efforts, including abandoning plans for a $283 million fintech campus in West Hartford, Conn., a move Ideanomics said was due to higher than expected site remediation costs. Yang peppered her reports with such terms as “spectacular failure” and “over promised and under delivered”. The timing is interesting as her negative report on Ideanomics was published at the same time as Wu was suing Guo.
Dumping on Chinese companies is a favorite tactic of Yang’s and has sometimes ended in spectacular failure. As far back as 2014 she disparaged Alibaba and beginning in 2015 did the same thing to JD.com.
“The J Capital analyst has a lengthy and documented track record of bearish pronouncements about the Chinese economy and companies, including Alibaba, many of which have been proven wrong. She questioned Alibaba’s finances as far back as 2014, for instance, and later recommended shorting the stock. Alibaba stock has almost tripled since. In 2015, she set a price target on JD.com of $23.36. The stock now trades at almost twice as much, even accounting for recent market turbulence. Digital news outlet Quartz called her firm ‘a bearish-on-China research firm’, and Barron’s has said on multiple occasions that Stevenson-Yang is a bear on China.” (16)
The war against Bruno Wu and his proxy Ideanomics gets nasty after June 24 when Yang published Champion of Stock Promotes . From the report’s disclaimer:
“Be warned. We are short-sellers. We are biased. We do our best to find and present facts, based on extensive primary research and using public sources. But we will profit if these stocks decline in value. We do not offer advice. We present our views.” (17)
J Capital’s report on Ideanomics, followed by a similar report by Nate Anderson from Hindenburg Research two days later (18), was released shortly after the stock’s peak at $3.29 on June 22, 2020 which subsequently fell to $1.42. Will Ideanomics recover and keep growing its EV business in China, and become like Alibaba and JD.com, another failed attempt by Yang to discredit and damage a company and its US shareholders?
Was the short report the culmination of Guo’s war against Wu? We’ll likely never know for sure but the linkages between Guo, Bannon, Bass and Yang are there for anyone to see. What’s next in this drama? In an article published August 5, the Daily Mail reported:
“Billionaire Chinese fugitive ‘is being investigated by the FBI over the funding of his media activities in the US and his ties to Steve Bannon” (19)
“The FBI is reportedly investigating an exiled Chinese billionaire Guo Wengui over his funding of a slew of media projects in the US and his involvement with former White House adviser Steve Bannon.
Sources familiar with the matter told the Wall Street Journal that FBI agents have been speaking with acquaintances of both Guo and Bannon over the past six months in an effort to obtain information about Guo’s activities in the US. The sources said agents specifically asked about the funding of a media company linked to Guo that hired Bannon as a consultant in 2018.”
Although the story of the war between two New York-based Chinese billionaires is likely far from over it’s worth asking some questions about Guo’s ability to pay for political influence and whether he bought introductions that can be turned against companies like Ideanomics. How did Steve Bannon end up in the middle of this war and did his relationships with anti-Chinese analyst Yang get used to purposely damage Ideanomics? How long will Guo survive in the United States while making so many enemies? If there’s a change in government this November will he be able to curry favor with the new administration and stay out of a Chinese prison? Stay posted.