One of the obscure chapters of US-based political organizations with links to the anti-government movement behind the 2019 riots may soon be coming to an end. The arrest in the United States of Guo Wengui, one of China’s most wanted fugitives, is expected to bring to a close a regrettable episode of a massive political and financial scheme.
The self-described billionaire tycoon has been indicted in New York on 11 counts related to an alleged US$1 billion fraud. He fled to the US in 2014 following allegations of bribery and money laundering as President Xi Jinping began his multi-year anti-corruption campaign.
He first attracted attention in self-imposed exile by promising to spill the beans on official corruption and sex scandals on the mainland. But he shot to fame in Hong Kong in June 2019 when he broadcast live with disqualified MP and one of the leaders of the protest movement, Sixtus Baggio Leung Chung-hang, during a public rally.
In a broadcast that immediately went viral, Guo lectured Leung on tactics to use against the Hong Kong and mainland governments, while pledging to continue financial and diplomatic support for Leung and his fellow protesters. He cited his close aide and business partner Steve Bannon, who was once a top White House adviser to former President Donald Trump. Indeed, Bannon, who once called Guo “Beijing’s Donald Trump”, was arrested on his friend’s yacht in August 2020 on charges of fraud. York State, which was not included in the presidential pardon. Bannon’s allegations of fraud were not related to Guo.
Leung later fled to the US with national security charges pending against him in Hong Kong.
Guo has close ties to the Republican Party. According to a report published in October in The New Yorker magazine, “His businesses paid hundreds of thousands of dollars to Trump advisers, including Steve Bannon, Rudy Giuliani, and attorney L. Lynn Wood, to join efforts to overturn the 2020 [presidential] election.” “.
However, Guo’s current legal troubles stem from his Rule of Law Foundation and Rule of Law Society, as well as GTV Media Group, a media company, according to the latest charge sheet from the US Department of Justice. The three organizations claimed to promote and support democracy and the rule of law in China, including Hong Kong.
According to US prosecutors, “In or around 2018, Kwok [Guo] established two alleged non-profit organizations, namely, the Rule of Law Foundation and the Rule of Law Society. Kwok used non-profit organizations to gather followers who were aligned with his stated policy objectives in China and who were willing to believe Kwok’s statements about investment and money-making opportunities.
Guo has been accused of concealing the scheme’s illegal activities and laundering hundreds of millions of stolen funds to continue the fraudulent operation.
At a press briefing, US Attorney Damian Williams said: “[Guo] has been accused of lining his own pockets with the stolen money, including buying himself and his close relatives a 50,000-square-foot mansion for US$3.5 million. m Ferrari and even buying two US$36,000 mattresses, and financing a US$37m luxury yacht.”
Guo was also behind GTV, which was launched ostensibly to promote his anti-China views among those who shared his political agenda. It was also named in the latest fraud indictment. But how is this related to Hong Kong?
Nothing is simple with Guo and his enterprises. Now, let’s go back to Hong Kong in 2019.
In addition to Guo’s association with the Hong Kong protest movement, was China critic and financial short-seller Kyle Bass, a former board member of GTV Media. This is where things got really complicated.
Shortly before the unprecedented protests and riots began in June 2019, Bass warned his investors that “Hong Kong is currently in the grip of one of the biggest financial time bombs in history”. Since then, he has repeatedly bet and lost against the Hong Kong dollar.
According to an October 2021 report in Bloomberg, “[Bass] has made big losses, implicating some investors who, according to the regulator, financed their shortfall through an illegal stock offering [from GTV].”
However, Bass and his Hayman Capital Management were not accused of any wrongdoing.
The same Bloomberg report said, “Details were set forth in a September SEC enforcement action that described the illegal funding of an ambitious start-up that sought to expose corruption involving Chinese government officials.” Went.”
According to the SEC, “The start-up – with ties to GTV Media Group, self-proclaimed billionaire Guo Wengui and ex-Donald Trump adviser Steve Bannon – last year raised US$339 million through an unregistered share sale.
The regulator said, “In June 2020, Saraca Media Group, the parent company of GTV, transferred US$100 million of proceeds to an unnamed hedge fund, which takes positions in Hong Kong dollars and other Asian currencies. According to the SEC, the fund lost more than 95 percent of the US$30 million it invested. That hedge fund is managed by Bass’ Heyman Capital Management…
“At the time of the GTV share sale, Heyman was launching a new strategy of making all-or-nothing bets that the [Hong Kong] currency’s peg to the US dollar would fall.”
The local currency, it turned out, was strong enough to resist the pressure of both the political upheaval of 2019 and the subsequent Covid-19 pandemic.
Many people dismiss claims of foreign interference in Hong Kong’s politics and economy outright. But Guo, Bannon, and their colleagues show only the tip of the iceberg. They should serve as a cautionary tale for the people of Hong Kong.