Asia-Pacific News

Jailed Chinese Tycoon Bids for Ark Royal

Enid Tsui in Hong Kong
Gome chief executive officer Huang Guangyu attends a news conference on July 25, 2006, in Beijing, China. China's biggest home appliance retailer, Gome Electrical Appliance Holding Ltd, finalized its HK$5.27 billion (US$675.64 million) deal to acquire its rival China Paradise Electronics Retail Ltd yesterday, better positioning the firm to ward off foreign competition in the sector
Chen Shuhui | ChinaFotoPress| Getty Images

Huang Guangyu, a Chinese tycoon serving a 14-year fraud sentence in a Beijing prison, has put in a bid for the retired UK aircraft carrier HMS Ark Royal with the aim of turning her into a floating exhibition hall and hotel.

The entrepreneur has often surprised business rivals by his ability to exert influence far beyond the confines of his prison cell. Backed by a group of loyal cronies, he has prevented the dilution of his controlling stake in Gome Electrical Appliances and orchestrated a perfectly executed management coup this spring that tightened his grip over the Hong Kong-listed retail group he founded in 1987.

Ark Royal is a light aircraft carrier that played a leading role in the Iraq invasion and was in service for 25 years. She is among a number of vessels put up for auction by the UK Ministry of Defence this year, including her sister carrier, HMS Invincible, which was sold for scrap in a £2m deal this spring, as reported by local media.

The MoD’s disposal services authority will strip Ark Royal of her weapons, communications systems and other advanced military equipment before handing her over to the eventual buyer, according to its website. But a Chinese bid is still likely to stumble in the face of political sensitivity.

Another Hong Kong-based company bought the Ukrainian aircraft carrier Varyag in 1998, ostensibly for turning into a leisure boat. A few years later, it sold the Varyag to the Beijing military and the vessel has re-emerged this year as China’s first aircraft carrier.

Mr Huang is the beneficial owner of the little-known Hong Kong company, called Eagle Vantage Asset Management, which submitted the bid. Zhao Qi Guang, a spokesperson for the company, on Tuesday said that the offer was driven by purely commercial reasons.

Mr Huang’s conviction last year on fraud and corruption charges could also diminish his chances of doing business with the British government.

He is not the only bidder. The MoD has had to extend the offer deadline because of the amount of interest it received. There are companies that want to sink Ark Royal off Devon, in the south of England, and turn her into a diving wreck, for example, according to local reports.

After a 25 year long life span, the HMS Ark Royal aircraft carrier is due to be decommissioned as part of government spending cuts.
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There is another Chinese bidder. Lam Kin-bong, a Birmingham-based restaurateur with business interests in mainland China, failed to buy the Invincible despite making a high offer of £5m and he has returned with a bid for Ark Royal. His business partner involved in the previous auction said Mr Lam would be bidding through a Portugal-registered company this time to avoid “political issues”.

It is not clear how much the bids are and the MoD is expected to name the winner within weeks.