Suning Chairman Resigns After Bailout, Underscoring Volatility Among China’s Richest

Then Suning Appliance Chairman Zhang Jindong made the cover of the 2006 China Rich List issue of Forbes Asia, successful debuting at No. 19 with a fortune worth $838 million. In an interview, he foresaw the prosperity the country was set to enjoy in the coming years. “When I look around Asia or at the U.S., I think China has the best opportunities.” His departure from the company as chairman this week after a $1.36 billion bailout last week underscores how volatile life is these days among China’s richest. 

Suning (now called Suning.com), still one of China’s largest retailers, on July 12 announced Zhang Jindong, his Suning Holdings Group and Suning Appliance Group had sold a 16.96% stake to a state-backed group that included Huatai Securities, Alibaba, Haier, Midea, TCL and Xiaomi, after a nearly 6% Zhang stake in Suning was frozen by a court. Zhang will continue as honorary chairman, Suning said yesterday. “With the improvement and upgrade of governance structure, Suning.com will become a new socialized enterprise for the market,” according to a press release.

The ever-deepening digitalization of business and life, a mixed China real estate market, other fallout from the pandemic, and changing norms between the government and private sector are making these challenging times for China’s rich. Zhang is hardly the only name to struggle. No. 1 on the Forbes China Rich List in 2016, Gome founder Wong Kwong Yu, recently ended a jail sentence, but his retail-focused $1.6 billion fortune today is below the $2.3 billion he had in 2006. He has been far surpassed by more nimble online companies such as Pinduoduo, whose main founder is worth $39.5 billion on the Forbes Real-Time Billionaires List today. China’s data probe on U.S.-listed tech companies has wiped out hundreds of billions of dollars of wealth this year and lifted the Cyberspace Administration of China into a key regulatory role for mainland companies looking to establish an international presence. Alibaba’s Jack Ma extended period of “laying low” after politically incorrect criticism of regulators is also less than reassuring for many successful business leaders and investors. 

And yet China continues to have vast economic opportunities and outstanding talent. Recent tumult and economic overhaul doesn’t mean that fortunes won’t be made by businesses that meet its consumer, healthcare and other needs; rather, it suggests an opening for those able to navigate the complexities.

@rflannerychina