16 September 2019

Something big may be cooking behind claims against power queen

Li Xiaolin {李小琳}, chairwoman of China Power International Development Ltd. (02380.HK), is in the spotlight after allegations surfaced in a British newspaper last week that she was the go-between in a shady deal over New China Life Insurance Co. Ltd. (01336.HK, 601336.CN).

Citing US court papers, the Telegraph reported on Friday that Li allegedly helped behind the scenes in 1995 to broker a deal in which Swiss Zurich Insurance secretly bought a stake in New China Life before China opened up its insurance market to foreign businesses. 

Li denied any such involvement and rejected the claims as slander over the weekend. While she denied personal involvement with any insurer, domestic internet forums were rife with claims that Li’s husband had held a senior position at New China Life.

Such negative publicity about a family member of an incumbent high-ranking Chinese official (Li’s elder brother is the provincial governor of Shanxi) is unusual, particularly during the sensitive period in the run-up to the Central Committee’s plenary session next month, a gathering that is expected to map out some far-reaching policies for the world’s second-biggest economy in the coming years.

The daughter of a former premier, Li, who has long been dubbed China’s power queen, has been vice president of China Power Investment Corp., one of the nation’s big-five electricity utilities and the parent firm of China Power International Development, since 2003.

The accusations against Li, who is well-connected to top government cadres and whose family is one of the major players in China’s electricity generation industry, may indicate some major power sector reforms are cooking in the run-up to the all-important session.

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