The chairman and largest shareholder of the Hong Kong Listed Nan Hai Corporation, Yu Pun-hoi, was declared bankrupt by a Hong Kong court on March 26. He was a prominent figure in Hong Kong who publicly supported the Chinese Communist Party (CCP).
The bankruptcy order was issued following a bankruptcy petition filed by CCB International Overseas Ltd, a subsidiary of China Construction Bank. Mr. Yu’s company reportedly owed CCB International Overseas more than HK$416 million ($53.13 million), according to the Hong Kong newspaper, The Standard.
On the same day, Mr. Yu’s lawyers applied for a postponement of the hearing and submitted new evidence to prove that the value of his stake in Nan Hai Corporation was sufficient to offset his debt. However, this was rejected by CCB International Overseas and the court.
Mr. Yu originally held 59.25 percent of the shares of Nan Hai Corporation. Many of these shares had been used as collateral for financing in the past. Four of his subsidiaries, holding 45.82 percent of the total capital, had already been taken over by the trustee of CCB International Overseas in May 2023. Meanwhile, CCB International Overseas’ stake in Nan Hai Corporation had increased to 50.85 percent.
Another subsidiary, Staverley Assets, showed that 4.65 percent of Nan Hai Corporation’s equity had been transferred to China’s CITIC Capital. Mr. Yu’s ex-wife Kung Ai Ming and his son Yu Ben Hei jointly held approximately 9.41 percent of Nan Hai Corporation’s shares, which had also been transferred to CITIC Capital earlier.
At this point, most of Nan Hai Corporation’s shares had been transferred to the Chinese state-owned banks.
Launch of Media Empire
Mr. Yu first gained fame throughout Hong Kong through his 1992 acquisition of the newspaper Ming Pao. At the age of 33, he won the bid to acquire Ming Pao over competition from Keith Rupert Murdoch’s News Corporation, causing a sensation in Hong Kong.Ming Pao was a top-tier newspaper in Hong Kong at the time. After Mr. Yu took over, he was elected chairman of the Newspaper Society of Hong Kong and established a huge media empire. He not only expanded Ming Pao to Canada but also acquired Asia Weekly from Time Warner in the United States.
Business Dealings in China
After 1999, Mr. Yu seized the opportunity of China’s stock and real estate market policies, continuously acquiring shell companies for restructuring and fundraising. He again received strong support from the CCP authorities and developed IT industries, real estate, cinemas, network media, and more.In 2000, after restructuring the company, he founded Nan Hai Corporation and Sino-i Technology.
Nan Hai Corporation’s subsidiaries delved into the film industry, owning over a thousand cinemas in mainland China.
Mr. Yu also invested in producing several films on Chinese history and culture that flopped at the box office. Among them, the 2010 film “Confucius” was screened globally with a distribution scale of 2500 film copies, creating a record in the history of Chinese cinema. This became handy teaching material for the CCP to promote Confucius Institutes worldwide. However, Confucius Institutes are part of the CCP’s United Front propaganda efforts under the guise of Confucius.
In 2008, he founded the Tsinghua University Sino-American Research Center and two years later established the Peking University Chinese Culture Development Research Center, serving as chairman of both centers. Mr. Yu has become an ambassador for promoting “Chinese soft power,” advocating the CCP’s views on China’s role in the world and Sino-U.S. relations as a cultural scholar, he was invited to participate in various international roundtable meetings and Track II dialogues.
Serving as the CCP’s Mouthpiece
In 2009, Mr. Yu acquired the U.S.-based Chinese-language news website Duowei News, retaining the original team to continue operations.Duowei News was previously widely regarded as a mouthpiece for former CCP leader Jiang Zemin. After Mr. Yu took over, the headquarters moved from New York to Beijing. The CCP’s propaganda content remains unchanged, only with more support for its current leader, Xi Jinping.
U.S.-based Chinese dissident He Qinglian pointed out in her book “Red Infiltration: the Truth About the Global Expansion of Chinese Media” that Duowei News took on the task of disinformation campaigns whenever there were intense internal struggles within the CCP.
Business Misfortunes
On April 1, 2022, the Nan Hai Corporation was suspended from trading on the Hong Kong Stock Exchange. The reason was its failure to disclose its 2021 annual performance report as scheduled.On April 26, 2022, Duowei News suddenly shut down. Most staff were laid off, and a few were transferred to HK01.
China current affairs commentator Li Muyang said that due to the impact of the pandemic, Nan Hai Corporation had accumulated losses of nearly 5 billion yuan (US$700 million) since 2021. Still, the board chose not to close its worst-hit cinema business but instead stopped the operation of Duowei News, which had only a few dozen employees, evidently due to political reasons.
Chinese political commentator Zhang Jie pointed out that Duowei News occasionally published articles that were seemingly critical of Xi since it poses itself as an overseas Chinese-language media that is supposedly independent. He said, “I speculate that some of its articles may have [unintentionally] angered Xi.”
In June 2022, CCB International Overseas filed a lawsuit in the High Court of Hong Kong to recover debt from Mr. Yu and his two companies, which eventually led to his bankruptcy.
In July 2022, Mr. Yu and Nan Hai Corporation were sued by China Merchants Bank in a Chinese court, claiming that Mr. Yu owed more than $53.4 million. China Merchants Bank is about to take over Mr. Yu’s film production company, Orange Sky Golden Harvest, before it brings him any returns after his acquisition in 2017.
So far, almost all of Nan Hai Corporation’s assets and shares have been taken over by the CCP’s state-backed banks. After the Hong Kong court’s ruling on March 26, his assets have essentially become worthless.
Ironically, Mr. Yu cheered the passing of Hong Kong’s Basic Law Article 23 on March 20, which further eroded Hong Kong’s civil liberties to ensure the CCP’s rule of the former British colony.
