Thread by @PekingMike

THREAD about McKinsey hiring the son-in-law of soon-to-be Chinese Premier Wen Jiabao in 2002. This was part of our story on McKinsey's work with authoritarian and corrupt governments around the world. This one:
nytimes.com/2018/12/15/wor…

So here's the scene. in 2002 Ping An Insurance, which since 1997 had been working closely with McKinsey to restructure and become a modern insurance company, was preparing for a big IPO in Hong Kong.

In 2002 a young man, 27-years old, starts working as an associate at McKinsey. Harvard records show he was a Baker Scholar at Harvard Business School, which puts him in the top 5% of his class. This is a classic McKinsey hire. His name in Liu Chunhang (刘春航）。

But he was more than just well-qualified, he was by then the son-in-law of Wen Jiabao, who in late 2002 was vice premier supervising finance, including the insurance industry.

That would include Ping An Insurance, McKinsey's client. It was remarkably interesting timing, because three months after he started working there, this happened:

This is from page VIII-2 of Ping An's IPO prospectus. What is it? It is how Wen Jiabao's family became billionaires, is what it is. It is all laid out in @DavidBarboza2 Pulitzer Prize winning article on the Wen family from 2012.
This one:
nytimes.com/2012/10/26/bus…

@DavidBarboza2 But it gets more interesting. One of the people overseeing Ping An's IPO was its CFO, a guy named Louis Cheung (张子欣）。 He had been until 2000 a partner on the Ping An account at....McKinsey.
This person:
ourhkfoundation.org.hk/en/node/961

@DavidBarboza2 Louis Cheung operates in the higher plane of Chinese princelings. It is the job of every CFO in China to know whom is married to whom, lest they accidentally offend someone powerful. That's borne out in his current job, as managing partner of Boyu Capital. What is Boyu Capital?

@DavidBarboza2 Boyu capital is the ultimate politically connected private equity company. Another partner is a guy named Alvin Jiang, the grandson of former Chinese President Jiang Zemin. Reuters did a super profile a few years ago. See:
reuters.com/article/us-chi…

@DavidBarboza2 Anyway, none of this means Mr. Liu did anything wrong. Both McKinsey and Mr. Liu's spokesman say he wasn't working on the Ping An account while at McKinsey, and we quoted them as saying that. But there is more to this story.

@DavidBarboza2 A spokesman for Mr. Liu, you ask? Liu Chunhang is a senior official at the CBRC, China's banking regulator. Here he is (Chinese):
cbrc.gov.cn/chinese/nsbm/D…

@DavidBarboza2 So we were communicating with the CBRC spokesman on a personnel matter? Any China reporter would know how odd that is for a government agency to be commenting on such matters. In fact, he had another spokesman.

@DavidBarboza2 Liu Chunhang was being represented by Sard Verbinnen, a crisis PR company. They are VERY GOOD and when companies are in big trouble, they go to Sard. Examples: Anbang, HNA, Valeant Pharmaceuticals. They represent their clients with notable competence, in my experience.

@DavidBarboza2 That was certainly the case with Mr. Liu. But this is the first time I can recall that a sitting Chinese official has been represented by a top-flight American crisis PR company, and on his government salary, no less...but there is more...

@DavidBarboza2 Mr. Liu left McKinsey in July 2003, after less than a year on the job. He worked in North America. He went to Cambridge to get his PhD under Peter Nolan. This guy:
devstudies.cam.ac.uk/ourpeople/pete…

@DavidBarboza2 Professor Nolan is pretty close to the Wen family, according to the British press:
telegraph.co.uk/news/worldnews…

@DavidBarboza2 After Cambridge and a brief stint in academia in Beijing, Mr. Liu was in government at the CBRC, where he has been for more than a decade.

@DavidBarboza2 All this is very interesting, but we have no evidence that Mr. Liu was hired by McKinsey for any other reason than he was qualified (McKinsey says this too), and we have no evidence he worked on the Ping An account. But the coincidences and timing were, to me, stunning.

@DavidBarboza2 1. The Wen family fortune in Ping An shares was acquired during his short tenure at McKinsey
2. One of the people in charge of the IPO was an ex-McKinsey partner who is now partnered with a high-ranking princeling, the grandson of Jiang Zemin.
And then there's this....

@DavidBarboza2 What is that? It is the registration for Fullmark Consultants. This is a company registered in the British Virgin Islands in August 2004, two months after the Ping An IPO, by Liu Chunhang. He later transferred control to Wen business associate and also to his wife, Wen Ruchun.

This document came out in the @ICIJorg Offshore Leads in early 2014 in a story written by @ael_o -- and by then, people were very familiar with Fullmark Consultants. Why? Because of this story by @davidbarboza2 @jbsgreenberg and @benprotess
dealbook.nytimes.com/2013/11/13/a-b…

@ICIJorg @ael_o @DavidBarboza2 @jbsgreenberg @benprotess Fullmark Consultants was part of the DOJ investigation into JP Morgan's "Sons And Daughters" program - the one that in 2016 resulted in a big fine from the Department of Justice.
justice.gov/opa/pr/jpmorga…

@ICIJorg @ael_o @DavidBarboza2 @jbsgreenberg @benprotess Anyway, none of this is evidence of anything more than what Mr. Liu and McKinsey claim, which is that his work at McKinsey and his hiring by the firm have nothing to do with his family ties. But now I hope you see why I thought it was important to include.

@ICIJorg @ael_o @DavidBarboza2 @jbsgreenberg @benprotess I'd love to follow up on this story if anyone has any detail that would add texture to it, so would love to hear from anyone with more information. Thank you. END THREAD