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Caixin: Tumble in Share Price Puts Well-Connected Tycoon in Spotlight

Caixin online reported that Che Feng, who owns a majority stake in Hong Kong-listed Digital Domain, was detained on June 2, 2015.
On June 3, as rumors circulated that Che, son-in-law of a former central bank governor, was under investigation, the share price of Digital Domain plunged 41.4 percent. Digital Domain is a special effects producer for several Hollywood blockbusters. Within days, Hong Kong-based Apple Daily disclosed that Che had close ties with Zeng Wei, son of Zeng Qinghong, China’s former vice-president and member of the Politburo Standing Committee.
Several sources said the inquiry into Che was triggered by an investigation into Ma Jian, a former vice minister of state security, and Guo Wengui, a property tycoon who controls Beijing Pangu Investment Co. and was a stakeholder in Digital Domain. The Communist Party’s graft buster detained Ma in January. Guo is overseas.
The predecessor of Digital Domain was Sun Innovation Holdings, Ltd. Documents from the Hong Kong stock exchange show that, in September 2012, Guo purchased 8.6 percent of the company for HK$ 0.083 per share from Che’s brother, Che Tao. Guo sold all his stock on January 16 at HK$ 0.18 per share, making a profit of about HK$ 80 million.
People with knowledge of the situation said Guo and Che remain close. Che once loaned 600 million yuan to Guo to help him get through a tough period and this cemented their relationship.
Source: Caixin Online, June 29, 2015; Apple Daily, June 5, 2015