China’s ‘Fake Divorces’: Wealthy Couples’ Stock Transfers Draw Regulatory Attention

Most of these divorces are intended to cash out stock holdings, allowing these billionaire couples to avoid certain risks or audits, academic says.

A woman leaves the Stock Exchange building in Shanghai, China, on Nov. 4, 2020. Hector Retamal/AFP via Getty Images

Divorces among China’s wealthy have been in the headlines this year, with at least 10 A-share listed company executives filing to end their marriages, resulting in significant amounts of shares changing hands during divorce settlements.

The latest related divorce was made public on Sept. 15, when Sichuan Guoguang Agrochemical Co., Ltd. announced that chairman Yan Yaqi and his wife Hu Lixia had completed divorce procedures after “friendly negotiations.” They also made relevant arrangements for dividing shares among themselves, along with other matters.