Posted on 01/13/2004 1:40:43 PM PST by Tailgunner Joe
There is a great deal of security concern over who is flying on foreign airliners bound for the United States. However, there seems to be little if any security concern over the ownership of foreign airlines. Victor Li, son of the famed Chinese billionaire Li Ka-shing, is poised to take control of Canada's flag airline, Air Canada, by plunking down more than a half billion dollars.
Victor Li holds a dual Canadian-Chinese citizenship, which entitles him to buy as much as 31 percent of Air Canada and appoint five of Air Canada's board of directors.
His offer has a great deal of appeal to the bankrupt airline. The restructuring deal gives $450 million in shares to Air Canada's creditors.
Li's offer also cuts out Air Canada's other investors, leaving them only a fraction of a percent of the airline.
The biggest problem with Victor Li is his close working and financial relationship with his father. The Li family was the subject of a massive Canadian intelligence and RCMP probe, Project Sidewinder. The final report, "Chinese Intelligence Services and Triads Financial Links in Canada," concluded that Li Ka-shing is closely associated with the Chinese government.
The fact is that Li Ka-shing is no ordinary billionaire. His company Hutchison Whampoa operates the two ports on the Panama Canal, the Pacific port of Balboa and the Atlantic port of Cristobal. Li Ka-shing's official bio from the Clinton White House states that the billionaire was convicted of insider trading in 1984 but served no time in jail.
According to recently declassified documents from the U.S. Commerce Department, Li Ka-shing is a very special man in Beijing, Washington and Hong Kong.
"Li is reputed to have a close business relationship with key figures in Beijing and he has a number of real estate and infrastructure projects in the mainland. These close relationships were said to be key to his obtaining the prime site on Beijing's Wangfujing for his USD2 billion Oriental Plaza Project," states an August 1999 from the American Embassy in Hong Kong.
Li Ka-shing paid $125 million to kidnappers to return his son Victor. According to reports, the kidnappers took two days to retrieve the large sum of money. Li reportedly also asked Chinese President Jiang Zemin to help capture the criminals. According to official U.S. documents, Li got his revenge and more.
"Some have suggested that it was because of Li's mainland connections that the man behind the 1996 kidnapping of his son Victor was arrested last year in China and swiftly executed. Li is a leading member of Hong Kong's ethnic Chinese business elite, a tycoon who is no democrat. This fact is reflected in his recent claim that he canceled a HKD10 billion (USD1.3 billion) project because of the unfavorable business climate created by Hong Kong's politicized (more democratic) business climate."
Li and the Chinese Army
The United States is concerned about the Chinese billionaire's growing influence. To protect national security, the Bush administration recently sank a deal to sell the international communications firm Global Crossing to Li Ka-shing and Hutchison Whampoa.
The fact is that Li Ka-shing has a long history of helping the Chinese military erect communications networks using U.S.-made equipment. For example, in 1989 Li Ka-shing raised $120 million to buy a Hughes communications satellite for AsiaSat.
AsiaSat is also a front company for the People's Liberation Army (PLA). According to Aviation Week and Space Technology, AsiaSat is part owned by the Chinese Army unit COSTIND or the Commission on Science, Technology and Industry for National Defense. The AsiaSat Hughes satellite regularly carries "military communications" traffic for PLA units and Chinese military owned companies.
A 1996 report written by then U.S. Ambassador to China James Sasser alleges that the Chinese Ministry of Posts and Telecommunications (MPT) and Li Ka-shing were directly involved with the PLA in financing the communications networks for the Chinese army.
The report also states that the PLA was directly involved in the so-called "civilian" Chinese fiber optic communication systems. Sasser's report noted that the PLA actively worked on a Ministry of Posts and Telecommunications (MPT) fiber optic network that the Clinton administration stated was "civil" for the House National Security Committee.
"For example," wrote Sasser, "in laying long distance fiber optic lines for the MPT's telephones and digital data network, the PLA has provided soldiers to do much of the work. The PLA cadres are considered disciplined and hard working. Once the cable has been laid, the MPT typically allocates some of the bandwidth to the PLA."
In 1997, the Rand Corp. wrote a secret report on the "Chinese Defense Industry" and included a section on Li Ka-shing and his business with the Chinese army.
The Rand report was obtained in a successful federal lawsuit against the Commerce Department. The report highlights Li Ka-shing's direct connections to the Chinese military.
According to Rand's report, "Hutchison Whampoa of Hong Kong, controlled by Hong Kong billionaire Li Ka Shing, is also negotiating for PLA wireless system contracts, which would build upon his equity interest in [Chinese army] Poly-owned Yangpu Land Development Company, which is building infrastructure on China's Hainan Island."
U.S. Commerce Department documents show that law enforcement agencies were very concerned about Li Ka-shing's connections to the Triad gangs. A 1995 cable from the American Embassy in Nassau noted that Li Ka-shing had signed an agreement to build an $88 million container ship terminal in the Grand Bahamas.
Curiously, for a harmless deal done by a Hong Kong tycoon, the copy list for the cable is addressed to several law enforcement agencies such as the Customs Service and the Drug Enforcement Agency. "Reftel describes U.S. agencies' security concerns about possible smuggling attempts through the terminal," states the cable from the American Embassy. "Post will request via septel assistance in addressing these concerns while port development plans are still on the drawing board."
In addition, the Drug Enforcement Agency (DEA) refused to release criminal data on Li Ka-shing citing that to do so would "violate" the billionaire's right to privacy.
'Threat' to Panama Canal
One document on Li Ka-shing, previously discovered by Larry Klayman and Judicial Watch, a watchdog group in Washington, came from the U.S. Defense Department. According to an October 1999 "Intelligence Assessment", prepared by the U.S. military Southern Command, the Hong Kong billionaire is a "threat" to the Panama Canal.
"Hutchison Whampoa's owner, Hong Kong tycoon, Li Ka-shing, has extensive business ties in Beijing and has compelling financial reasons to maintain a good relationship with China's leadership," states the 1999 assessment.
"For example, Hutchison Whampoa could threaten to shift some business from Panama to its facilities in the Bahamas, thus giving the company additional leverage over the Panamanian government."
"Hutchison's containerized shipping facilities in the Panama Canal, as well as the Bahamas, could provide a conduit for illegal shipments of technology or prohibited items from the west to the PRC, or facilitate the movement of arms and other prohibited items into the Americas," concluded the U.S. military intelligence report.
Missiles Sent Airmail; Arming American Gangs
In the 1980s Li Ka-shing helped found China International Trust Investment Co. (CITIC) with the direct approval of Beijing. CITIC later would set up the Chinese army's front company Poly Technologies. Polytech has sold billions of dollars of Chinese arms around the world with financing provided by Li's CITIC.
In 1996, CITIC and Polytechnologies were directly involved in the illicit shipment of 2,000 Chinese-made AK-47 assault rifles into California. The machine guns were to be sold to criminal gangs in American cities. Polytech officials were indicted in U.S. courts but never prosecuted because they fled the country.
Yet, Li Ka-shing also has large investments in other, more legitimate enterprises, including airlines. Li's CITIC group owns a majority share of Dragoniar, an international airline based in Hong Kong.
In 1996 Dragonair, then partly owned by the CITIC and Moctar Riady of Lippo Group, was fined for carrying a live air-to-air missile in the cargo hold of a L-1011 passenger airliner. The shipping company, China Electronics Import-Export Company or CEIEC mislabeled the missile as machine parts. The missile was discovered by Singapore officials who inspected the Dragonair L-1011's cargo hold by accident.
The advanced Chinese copy of a Russian infrared homing "Archer" air-to-air missile was reportedly fully active and armed with an explosive warhead. U.S. intelligence officials stated openly in Aviation Week and Space Technology that they suspected the weapon was to be covertly upgraded in Israel using stolen U.S. missile technology.
Red Air
Clearly, the Li family has some real problems when it comes to national security issues. These problems cost the senior Li his share of Global Crossing. Yet our neighbors in Canada refuse to ask the same questions about Victor Li and his planned acquisition of their flag airline.
However, if his purchase of Air Canada does go through as planned the air carrier might have to change its symbolic red maple leaf to a new pattern ... a large red star.
Nonsense. Please cite your source or shut yer...
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