Billionaire Fails in Bid for Global Crossing

Charles R. Smith
Thursday, March 6, 2003

This is the second article about Li Ka Shing's bid to purchase Global Crossing. Read Part I: Global Double Crossing.

Li Ka Shing has lost the first round in his effort to take over Global Crossing. Li's bid for the defunct telecommunications giant failed before a U.S. national security committee charged with oversight.

The credit for causing Li's failure must be distributed evenly to both NewsMax and our readers for passing so many valuable tips about the reclusive billionaire to the FBI. In the end, Li had to withdraw his offer to buy Global Crossing because he knew it would fail.

According to reports, Li is considering a new plan that would make him only a passive investor in Global Crossing. Li's plan is for his company, Hutchison Whampoa, to create a proxy group of four approved "distinguished Americans" on the 10-person Global Crossing board.

A Hutchison director also would be prevented from serving as the reorganized company's chairman, as was planned by the original purchase agreement.

However, U.S. security experts doubt the Beijing billionaire's plan to take over Global Crossing will be an honest one. Li's ability to purchase influence inside the U.S. is limited only by his vast wealth.

"Which four distinguished Americans?" questioned one intelligence source.

"Al Haig, Henry the K, Scowcroft and a utility infielder to be named later?" joked the source.

Hutchison spokeswoman Laura Cheung rejected suggestions that Hutchison or its chairman, Li Ka Shing, are instruments of Beijing or that its Global Crossing investment could threaten U.S. security.

"The Chinese government doesn't have any officials on our board, and therefore has no influence at all over our business," stated Cheung.

Despite the assurances given by Mr. Li's paid PR consultants, a great deal of concern is being displayed publicly over his plan to buy Global Crossing. The rejection by the U.S. government oversight board was not based on conjecture or simple allegations that Mr. Li is part of the Chinese Communist leadership.

"Since when does one have to sit on a board of a company to exert influence?" questioned David Chu, a leading human rights advocate for Free China.

"All that the dictators in Beijing need to do is to threaten Li Ka Shing in no uncertain terms. Do people honestly believe that he wouldn't accommodate their requests, as if he hasn't already? Li Ka Shing operates from Hong Kong that is now part of the Motherland, Communist China," stated Chu, who leads a group that advocates a U.S. consumer boycott of Chinese goods.

Li Hates Democracy

Human rights and Chinese democracy advocates have good reason to distrust Mr. Li. According to the U.S. State Department, Li has little respect for human rights, justice or democracy.

Li Ka Shing's connections inside communist China allowed him to obtain quick justice against the alleged kidnappers of his son, and his disdain for democracy forced him to cancel a billion-dollar deal inside Hong Kong.

"Li is reputed to have a close business relationship with key figures in Beijing and he has a number of real estate and infrastructure projects in the mainland," states an August 1999 cable from the American Embassy in Hong Kong.

"These close relationships were said to be key to his obtaining the prime site on Beijing's Wangfujing for his USD2 billion Oriental Plaza Project. Some have suggested that it was because of Li's mainland connections that the man behind the 1996 kidnapping of his son Victor was arrested last year in China and swiftly executed. Li is a leading member of Hong Kong's ethnic Chinese business elite, a tycoon who is no democrat. This fact is reflected in his recent claim that he canceled a HKD10 billion (USD1.3 billion) project because of the unfavorable business climate created by Hong Kong's politicized (more democratic) business climate."

Li and Organized Crime

Commerce Department documents also show that law enforcement agencies were very concerned about Li Ka Shing's connections to the Asian "Triad" organized crime gangs. A 1995 cable from the American Embassy in Nassau noted that Li had signed an agreement to build an $88 million container ship terminal in the Grand Bahamas.

Curiously, for a harmless deal done by a Hong Kong tycoon, the copy list for the cable is addressed to several law enforcement agencies such as the Customs Service and the Drug Enforcement Agency.

"Reftel describes U.S. agencies' security concerns about possible smuggling attempts through the terminal," states the cable from the American Embassy. "Post will request via septel assistance in addressing these concerns while port development plans are still on the drawing board."

In fact, the Drug Enforcement Agency rejected a Freedom of Information request on Mr. Li, citing that they could not release his criminal records without his approval to waive his privacy rights.

Li’s CITIC Part of Red Government

According to a recent biography entitled "Li Ka Shing," the billionaire formed a partnership with two leading members of the Asian Triad organized crime families, Robert Kwok and Henry Fok, to form the China International Trust Investment Company (CITIC). A Rand Corporation report on CITIC noted that the Beijing-based investment firm had acted as a front for Poly Technologies Inc., an arms manufacturer owned directly by the Chinese army.

According to the Rand Corporation report, "Poly Technologies, Ltd., was founded in 1984, ostensibly as a subsidiary of CITIC, although it was later exposed to be the primary commercial arm of the PLA General Staff Department's Equipment Sub-Department. Throughout the 1980s, Poly sold hundreds of millions of dollars of largely surplus arms around the world, exporting to customers in Thailand, Burma, Iran, Pakistan, and the United States."

According to a 1997 Rand Corporation report sponsored by the Clinton administration, CITIC is an "investment concern under China's governmental State Council." CITIC "became identified with the PLA as a result of the scandal surrounding Wang Jun and his visit to the White House on 6 February 1996."

In February 1996, President Clinton met with Chinese arms dealer Wang Jun after taking a donation from Arkansas DNC donor Charlie Trie. The Rand Corporation noted that "Wang Jung is both director of CITIC and Chairman of Poly Group, the arms trading company of the General Staff Department."

In short, Wang Jun was an arms dealer from the Chinese army. Wang Jun is not a member of the Chinese government. Wang, however, travels the world using an official diplomatic visa issued by the PRC.

Li’s CITIC and the Red Army

The Rand report concluded: "CITIC does enter into business partnerships with and provide logistical assistance to PLA and defense-industrial companies like Poly. Poly's U.S. subsidiaries were abruptly closed in August 1996. Allegedly, Poly's representative, Robert Ma, conspired with China North Industries Corporation's (NORINCO) representative, Richard Chen, and a number of businessmen in California to illegally import 2000 AK-47s into the United States."

"Unfortunately for them," states the Rand report, "their 'customers' turned out to be undercover U.S. Customs and BATF agents, posing as members of a Miami syndicate. Poly's representative, Robert Ma, fled the country one step ahead of Federal law enforcement officials who had a warrant for his arrest, and his current whereabouts are unknown."

Li and Friends

Robert Ma may be in hiding but Li Ka Shing operates in the open. Li's partners in CITIC, Henry Fok and Robert Kwok, are also well-known inside U.S. national security circles.

Fok family leader Henry Fok is reported to be a member of the 14K Triad. According to Ed Timperlake and Bill Triplett, co-authors of "Red Dragon Rising": "Henry Fok first made his name by running United Nations-embargoed goods to China during the Korean War. His son was later convicted for trying to bring Chinese machine guns into the United States."

Robert Kwok reportedly leads the Kwok family businesses and is allegedly involved in the heroin-smuggling business inside Burma. In 1997, Commerce Secretary Daley met with Robert and his son Peter. Peter Kwok is the business partner of Sen. Dianne Feinstien's (D-Calif.) husband, Robert Blum.

Peter has also worked for Li Ka Shing and the Chinese army. In 1989, Peter Kwok helped CITIC and Li Ka Shing raise $120 million to buy a Hughes-built communications satellite for AsiaSat.

AsiaSat is also a front company for the People's Liberation Army (PLA). According to Aviation Week and Space Technology, AsiaSat is also partly owned by the Chinese army unit COSTIND, or the Commission on Science, Technology and Industry for National Defense. AsiaSat satellites regularly carry "military communications" traffic for PLA units and Chinese military-owned companies.

Li and COSCO

Li Ka Shing's largest business partner is the state-owned China Ocean Shipping Company, or COSCO. COSCO is the flag carrier for China, hauling official cargo exported by the Chinese government, including weapons. For example, the fully automatic AK-47 machine guns from Poly Technologies that were confiscated in the 1996 U.S. Customs sting operation were found onboard a COSCO ship.

U.S. Navy photos show COSCO cargo ships carrying missile-armed patrol boats bound for Iran and tons of depleted-uranium anti-tank shells for Pakistan. COSCO ships have carried jet fighters, missile parts and tanks for export to Iran, Iraq, Sudan, Syria and Libya.

COSCO is also part of the Chinese navy and wholly owned by the Chinese government.

COSCO is better known for its failed attempt to purchase the former Long Beach Naval Station with Li Ka Shing's Hutchison Whampoa. The failure was due mainly to national security objections voiced behind closed doors by U.S. Defense Department officials.

Li Ka Shing may not be an official member of the communist Chinese government but he is certainly a high-ranking partner. U.S. officials referred to Li as "Minister" during one meeting during the Clinton years. I doubt that reference was to Mr. Li's religious background.

According to one intelligence source, Li Ka Shing is to the Red Chinese army as Howard Hughes was for the CIA. This role may be an unofficial one but it certainly is profitable for both parties.

Yet Li Ka Shing does deserve an official title in the communist government. Admiral Li or General Li are the best two that I can determine, considering his record of service with the Chinese military.

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