Soho China sells to Blackstone, cementing owners exit


The Chinese economy is in tears. Factories are buzzing and foreign investment is pouring in. Despite this, the rich and powerful atop some of the country’s biggest companies are heading for exits.

The latest are Pan Shiyi and Zhang Xin, the husband and wife team that runs Soho China, a real estate developer known for its blobby and futuristic office buildings. By closing a deal this week to sell a controlling stake to investment giant Blackstone for up to $ 3 billion, Mr. Pan and Ms. Zhang are renewing the business as top entrepreneurs are the subject of public and official scrutiny in China like never before. before.

Soho China did not respond to a request for comment.

China’s most famous mogul Alibaba co-founder Jack Ma has kept an unusually low profile since late last year when the government began a regulatory crackdown on its businesses and the internet industry at large. Colin Huang, founder of Alibaba rival Pinduoduo, resigned as chairman in March, less than a year after stepping down as chief executive. In May, Zhang Yiming, founder of TikTok’s parent company, ByteDance, announced that he would step down as managing director to focus on long-term strategy.

Under the leadership of the Communist Party’s top leader, Xi Jinping, nationalism resurfaced in China and the government sought to exert more direct influence over the private sector. Even before this week’s sale, Mr. Pan and Ms. Zhang of Soho China had avoided the spotlight more than they did during a freer era of China’s economic recovery.

“For the big tycoons in China, today they have to be generally careful,” said Ling Chen, who studies state-business relations in China at the School of Advanced International Studies at Johns Hopkins University. .

Highly visible entrepreneurs, especially those in risky industries like real estate and finance, know that regulators will take a closer look at their businesses one day, Professor Chen said. “They just don’t know when that day is.”

Mr. Pan and Ms. Zhang’s rise, as they described it in media interviews and online, mirrored that of China.

Mr. Pan, 57, grew up in poverty in the remote northwestern province of Gansu and briefly worked for a state-owned oil company after college. In the early 1990s, he started a real estate company in the southern province of Hainan with some friends and made his first bucket of gold.

Ms. Zhang, 55, was born in Beijing and immigrated to Hong Kong when she was 14. She worked in factories for years before heading to Britain with the equivalent of a few thousand dollars in savings. After earning a Masters in Economics from Cambridge, she worked at Goldman Sachs.

It was presented to Mr. Pan in 1994. He proposed four days later. In 1995, they founded the company which would later be renamed Soho China.

As their towers began to penetrate the horizons of Beijing and Shanghai, Ms. Zhang and Mr. Pan became an “it” couple in business and society. Leading entrepreneurs, government officials and intellectuals attended their evenings.

Mr. Pan was also one of the first Chinese business leaders to recognize the power of the Internet in marketing and public relations. He wrote a popular blog in the 2000s. Then, when the Twitter-like social media platform Weibo arrived, he quickly became one of his most influential voices, garnering over 20 million followers.

In his articles on Weibo, he wrote about his childhood, China’s real estate policies, and Beijing’s air pollution. He has never been too sharp in expressing his opinions. But he wanted China to learn from its mistakes, such as its cruel treatment of the rich and educated classes during the Cultural Revolution.

After Xi took office as China’s supreme ruler in 2013, authorities began to target businessmen and intellectuals with large online subscribers. That year, the police arrested Wang Gongquan, a friend of Mr. Pan and a human rights advocate, accused of disturbing public order.

Mr. Pan and Ms. Zhang started selling their properties in China and spending more time in the United States. Ms. Zhang’s family and the Safra family of Brazil, long involved in international banking, have teamed up to buy a 40 percent stake in the General Motors building in Manhattan.

Chinese media have asked why Soho China is releasing billions of dollars in assets in China. They noted that the couple generously gave to Harvard and Yale but not at Chinese universities.

After the media accused Soho China of “fleeing” Shanghai by selling projects there, Mr. Pan written on Weibo: “Buying and selling is normal. Don’t read too much.

The company’s last big public event was the opening of Leeza Soho, a flexible, spiral-shaped skyscraper in Beijing, in late 2019. Zaha Hadid, the famous architect who designed the tower and a friend of Ms. Zhang, had died a few years earlier.

Last year, Ren Zhiqiang, a retired real estate mogul and friend of Mr. Pan, was detained for an essay which he shared with friends on a private discussion group. The essay criticized Xi’s handling of the coronavirus outbreak and the direction he was taking for the country. Mr. Ren was sentenced to 18 years in prison.

Today, that of Mr. Pan and Ms. Zhang’s Weibo accounts are filled with tasteless and friendly material: holiday greetings, book recommendations, photos of flowers in bloom in front of buildings in Soho China. Their two accounts are set up to show only posts from the last semester.

On Wednesday evening, minutes after Soho China announced the sale on its official Weibo account, Mr. Pan reposted the announcement without comment, in what online commentators called a “silent farewell.”

Albee zhang contributed research.


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