China Detains Executive Close to Family of Former Premier

The authorities in China have detained a wealthy investor who went into business with relatives of the previous prime minister, a sign that the anti-corruption campaign initiated five years ago by President Xi Jinping may again be closing in on a former top leader.

Duan Weihong, 49, who set up companies with relatives of Wen Jiabao, China’s premier from 2003 to 2013, was detained before a Communist Party congress last year, according to three friends and business associates who spoke on the condition of anonymity for fear of reprisals by the authorities.

Duan, also known as Whitney Duan, was a central figure in a 2012 investigation by The New York Times that showed Wen’s relatives controlled assets worth at least $2.7 billion.

There has been no official acknowledgment of Duan’s detention, and it is not clear who detained her, why and whether she is still being held. Emails and phone calls to her offices were not returned.

Reached by telephone, one business associate said any discussion of Duan’s detention could upset the authorities and put her in greater danger.

Another person close to her said she might have been detained as part of a corruption investigation into a former Politburo member, Sun Zhengcai, not Wen or his relatives.

Until last year, Sun appeared poised to join the party’s highest echelon of power and had been considered a possible successor to Premier Li Keqiang. But in July, he was removed from his post as the top official in the southwestern city of Chongqing, expelled from the party and put under investigation.

Duan’s connection to Sun is unclear. But she and her former husband, Desmond Shum, ran a company that acquired land around Beijing’s rapidly expanding airport before the 2008 Summer Olympic Games, according to corporate records. Sun had been the top official in the county where the airport is.

Sun’s downfall represented a remarkable show of power by Xi, who has taken down several senior officials since assuming office, often after encircling them in investigations that began with family members and underlings. But a move by the party against Wen, the former premier, would be extraordinary. Wen retired as scheduled a few months after The Times published its investigation, which was later awarded a Pulitzer Prize. The Chinese government criticized the article, saying it “smears China and has ulterior motives,” but never disputed its specific findings.

Internally, according to people with high-level party ties, Wen defended himself and his relatives and offered to submit to punishment if they were found to have violated any laws or party regulations. Two party insiders said at the time that Xi had expressed support for Wen.

But Xi has since ventured into uncharted territory with the prosecution of several party heavyweights, including China’s former security chief Zhou Yongkang, who was sentenced to life imprisonment in 2015.

Zhou, who had served with Wen on the elite Politburo Standing Committee, was the most senior Chinese leader to be imprisoned on corruption charges in more than 65 years of Communist rule.

“They blew through the sound barrier with Zhou Yongkang,” said Christopher K. Johnson, an expert on Chinese politics at the Center for Strategic and International Studies in Washington. “I don’t think that bothers Xi Jinping very much. It adds to the credibility of the anti-corruption campaign.”

Xi’s campaign has also ensnared some of the country’s wealthiest entrepreneurs, including those suspected of obstructing his policies, backing potential political rivals or possessing information that could be used against them.

Whispers of Duan’s detention began to circulate among China’s rich and powerful after she failed to show up for the September opening of a boutique hotel in Beijing developed with the Italian jewelry and luxury goods maker Bulgari. The hotel is part of a splashy, mixed-use development in the embassy district known as Genesis Beijing that has been led by Duan. It features a high-rise office tower and a spectacular new art museum designed by the renowned Japanese architect Tadao Ando.

Business associates said that Duan disappeared on or about Sept. 3, just weeks before the gala event for the hotel, and that government agents had prevented her from leaving the country in the weeks before. Several of Duan’s employees have also been detained, they said. A spokesman for Bulgari declined to comment.

Born in north China, Duan worked for a state-run property firm before setting up her own real estate company in Tianjin and making a fortune by age 40.

She bought homes in New York and London, and set up a private foundation, the Kaifeng Foundation, to support education and the arts, including a program at Harvard’s Graduate School of Education. A fellowship at Harvard that provides money for study in China is named after her and her former husband.

Duan’s relationship with relatives of Wen, who is a native of Tianjin, appears to date to the 1990s, when he was a senior official rising through the party’s top ranks. According to corporate records, she set up a series of companies with Wen’s mother, brother and daughter; one of her investment firms also invested in companies alongside New Horizon Capital, a private equity firm run by Wen’s son, Wen Yunsong.

Duan also helped several of Wen Jiabao’s relatives, including his mother, and their associates acquire an early stake in Ping An, one of the country’s biggest financial services firms, before its public stock offering in 2007. Those shares, which they have since sold, would have been worth almost $6 billion now.

In 2012, Duan acknowledged in an interview with The Times that she was close to the premier’s wife and family, and that she had registered companies using their names. She said she had borrowed their identification cards to hide her own stake in Ping An.

“When I invested in Ping An, I didn’t want to be written about,” she said at the time. “So I had my relatives find some other people to hold these shares for me.” In 2003, after Beijing was awarded the 2008 Summer Games, Duan set up two companies that acquired large plots of land near the airport, one as a joint venture with the airport authority and the local government. Several of Wen Jiabao’s relatives co-invested in the airport project.

Wen’s daughter, Wen Ruchun, was listed as a shareholder using an alias, Lily Chang. She used the same name when running an obscure consulting firm that received a $75,000-a-month contract from JPMorgan between 2006 and 2008.

In 2011, Global Logistics Properties, a Singapore company, acquired a large stake in the airport company for nearly $400 million.

Duan, who has also developed resorts with Adrian Zecha, the founder of the luxury hotel group Aman Resorts, has maintained a low profile in China in recent years, spending much of her time overseas, according to several of her associates.

Wen Jiabao has also maintained a low profile. The state-controlled news media showed him attending the party’s national congress in October, and a Hong Kong newspaper reported that he attended a funeral on Monday for a former doctor to the Chinese leadership.