China has charged the former chairman of chip conglomerate Tsinghua Unigroup Co (清華紫光), Zhao Weiguo (趙偉國), with crimes including corruption and illegally earning profits for his friends and family, the country’s anti-graft watchdog said in a statement yesterday.
Zhao is alleged to have handed profitable businesses to his relatives and friends to operate and purchased goods from units managed by his associates at prices higher than the market rate, the Chinese Central Commission for Discipline Inspection said.
The acts caused heavy losses to national interests, it said.
Photo: Reuters
Originating as a branch of China’s prestigious Tsinghua University, state-backed Tsinghua Unigroup emerged in the previous decade as a would-be domestic champion for China’s laggard semiconductor industry.
However, the company racked up immense debt under Zhao. It spent heavily on chip-related acquisitions, but also on unrelated, unprofitable businesses ranging from real estate to online gambling that eventually led it to default on a number of bond payments in late 2020 and face bankruptcy.
Tsinghua Unigroup last year completed a restructuring plan that placed it under the ownership of a vehicle controlled by Wise Road Capital Ltd (智路資本), Jianguang Asset Management Co (北京建廣資本) and a number of state-affiliated funds. Zhao was replaced by Li Bin (李濱) in July last year.
Financial magazine Caixin reported in the same month that Zhao had been taken away from his home Beijing by authorities and had since been out of contact.
Zhao is among the more prominent names swept up in a recent flurry of graft probes, reflecting how China’s top leadership has grown increasingly frustrated with a years-long failure to develop chips that can replace US circuitry.
The investigations sent shockwaves through an industry long accustomed to top-level support. Beijing had allocated more than US$100 billion to build up a domestic chip sector so the country could break its dependence on the West.
Additional reporting by Bloomberg
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