Thursday, April 29, 2010

Hunan's Taizinai sacks Goldman


Amazing tale of Chinese corporate malfeasance which unfortunately isn't in the minority for Chinese companies. Only thing missing from the story are the mistresses.

Naomi Rovnick in the SCMP:

As Western investments into mainland companies go, Goldman Sachs, Morgan Stanley and UK private equity firm Actis Capital's decision to plough US$73 million into yoghurt drink maker Hunan Taizinai may qualify as one of the worst.

Factories like temples...

"Li's Zhuzhou facility contains several enormous yoghurt factories built in the style of roman temples, clad with marble, with Pantheon-style columns lined up along one wall of each building, two people who have visited said.

The frontage of Li's office headquarters is a near-exact replica of the Gate of Heavenly Peace in Beijing. That building is so vast that the lobby covers around 7,000 square feet. The founder's office, on the floor above, covers 7,000 square feet as well.

Li also erected a life-sized statue of himself in the Zhuzhou grounds, said to be made of solid jade. The price of the statue, which has disappeared from the facility, is unknown. But the ornament is said to have cost HK$130,000 just to transport from Shenzhen, where Li bought it."

Anyone still think they can consistently make money investing in small to midsize China companies?

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