China Detains Former Chief Of Leading Chipmaking Giant: FT

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.

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