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0 pointsralph845y ago0 comments

More likely the Chinese investors needed a way to evade capital controls in China and this was the vehicle.

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4 comments · 1 top-level

neaden5y ago· 3 in thread

How would this work for them? Is it easier if you are a big Chinese investor to buy stock in a small American company than to purchase it in a F500?

It's basically reverse money laundering to turn money that the government knows about into money that the government doesn't.

1. Make a really bad investment in an overvalued small company.

2. Company passes some portion of the money back to you in a way that the government doesn't know about.

3. Company goes bankrupt.

4. The party knocks on your door and asks you where all your money went and you point to a failed foreign investment.

This would be a poorly executed instance of this strategy right? Who in their right mind is getting fooled by a 100m dollar sandwich shop?

Interesting, thanks.

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