• Sat. Jun 10th, 2023

China Detains Former Chief Of Leading Chipmaking Giant: FT

ByAnusuya Lahiri

Jul 26, 2022
China Detains Former Chief Of Leading Chipmaking Giant: FT

  • Beijing has detained Zhao Weiguo, the former head of a vast Chinese conglomerate with state backing and deep investments in the global tech sector, the Financial Times reports based on local media stories.
  • The 54-year-old, who helmed cash-strapped chipmaking giant Tsinghua Unigroup for a decade, was taken from his home by authorities in mid-July.
  • The detention report follows years of heightening scrutiny of Tsinghua after Zhao struggled to repay and refinance the company’s large debts. 
  • Zhao made a fortune in property and forged ties with senior members of the Chinese government since assuming control in 2009. 
  • Zhao significantly benefited during the Hu Jintao government with a possible close tie with the former president’s son, Hu Haifeng. Haifeng’s tensions with China’s current president Xi Jinping further weakened Zhao’s position.
  • Still, up to 2017, Tsinghua secured $22 billion from state investors to fund its computer chip acquisitions. 
  • But Tsinghua defaulted on a domestic bond in late 2020 with total liabilities exceeding $31 billion, shocking investors, given the company’s ties to the Chinese state.
  • Tsinghua entered a court-ordered restructuring in 2021. 
  • Under Zhao, the company acquired French chipmaker Linxens and took a majority stake in data networking business H3C from Hewlett Packard Enterprise Company HPE
  • Recently, Tsinghua was declared to be owned by new investors, including private sector groups Wise Road Capital and Beijing Jianguang Asset Management.

Image and article originally from www.benzinga.com. Read the original article here.