The founders of Semcorp, which built a factory in Debrecen, were put under house arrest in China, according to the Ministry of Foreign Affairs, everything is fine

The Chinese authorities have launched an investigation against the founder-owners of Semcorp Advanced Materials Group, which is building a battery foil factory in Debrecen, and placed them under house arrest Paul Xiaoming Leeand Tony Xiaohua Lit. So far, no news has appeared in Hungary about the investigation taking place in China, but the Ministry of Foreign Affairs and Trade has already been able to examine the effects of the measures. The ministry’s press department did not answer our questions about the consequences of the investigation in Hungary, but it did say that according to the information received from the company, there are no interruptions in the construction in Debrecen.

The billionaire brothers and sisters were raided by the police at the end of last year, they are suspected of secretly trying to take their company’s capital abroad.

According to the news, 1.4 billion dollars, or about HUF 520 billion at the current exchange rate, were channeled out of the Semcorp Group. The total assets of the two brothers and their families are estimated at more than 10 billion dollars, i.e. HUF 3,700 billion, which makes them the richest entrepreneurs in the southern Yunnan province, but at the national level, this is not enough to enter the hundred richest Chinese billionaires.

American citizen Paul and Chinese Tony graduated from the University of Massachusetts in the 1980s, and also founded their business careers in the United States. In 2010, they switched from the packaging materials market to the business related to electric cars, and after the acquisition of the competition, together with Semcorp, they became world leaders in the production of separation films used in lithium-ion batteries in a decade. In recent years, the Shanghai-based company has become the main supplier to the battery plants of Samsung, CATL, which also built a factory in Debrecen, and several other global companies (such as LG and Panasonic). In 2020, the company agreed with the Hungarian government to build its first European factory in Debrecen, in the Southern Economic Zone, which will be able to produce ten percent of the world’s total separator film needs.

Péter Szijjártó in 2021, at the groundbreaking ceremony in Debrecen, the Minister of Foreign Affairs and Trade said that the investment

another chapter in the success story of Hungarian-Chinese economic cooperation.

Paul Lee also personally welcomed the investment, and the minister predicted that the construction would be completed by the second half of 2022, for which the Hungarian government provided a HUF 13 billion non-refundable subsidy. In fact, Szijjártó already announced last spring that they are discussing the doubling of the company’s investment. If this happens, the government will also be willing to provide additional large-scale support for the expansion.

Outside of China, the American The Epoch Times (ET) first reported on the official action against the billionaire brothers. According to the December article of the economic newspaper, the shares of Semcorp (Jünnan/Yunnan Energy in China) fell sharply on the Chinese stock market after the announcement about the house arrest. Since then, the exchange rate has not returned to its previous level.

ET’s experts claimed that this was not an isolated case: in China, towards the end of the year, many other wealthy entrepreneurs besides the Lees tried to mobilize their assets in order to leave the country. According to the newspaper, the wave of emigration among the super-rich can be traced back to several factors: it includes the chaotic Covid situation and regulatory tightening, but the events taking place in the Chinese Communist Party may also have fueled the entrepreneurs’ concerns.

24.hu asked the Ministry of Foreign Affairs whether they still trust the investing company, or whether the government will reconsider how much state support it will provide for the construction of the factory. The ministry did not respond to the questions, only writing:

the company did not indicate any interruptions in relation to the project, the investment is progressing at a fast pace, thanks to which it is possible to count on the start of the trial operation in the first half of this year.

By the way, the construction of Semcorp in Debrecen is just one of the huge investments related to the battery business. The South Korean EcoPro BM is building a production plant in the Southern Economic Zone with HUF 264 billion. The factory producing cathodes for electric car batteries will be the second largest investment in Hungary. The cathode factory will work with raw materials that are very dangerous for nature, and not dangerous for the workers either. For example, a huge explosion at the EcoPro BM Ochang plant in South Korea early last year killed one person and injured several others, and production had to be stopped for a long time.

However, the biggest attention was paid to the other Chinese giant, CATL, which Péter Szijjártó has so far fondly mentioned among its achievements due to its record-breaking investment.

Perhaps this is also why the Fidesz city administration of Debrecen was surprised by how strongly the population’s rebellion against the megaproject suddenly surfaced in the city, which was piled high with central subsidies.

Due to the disaster protection licensing procedure of the Chinese CATL battery factory, a public hearing had to be held in the city on Monday, which was drowned in scandal: the audience of several hundred people booed the company’s representative and did not allow him to speak for several minutes, and many shouters expressed that they considered the best solution to be to hold the presentation instead, they would “pack” immediately. The mayor of the city received unusually tough questions, László Papp who was asked whether he would really do everything to preserve the city’s future, or whether he was willing to sacrifice good air and a healthy environment for the sake of a factory working with dangerous substances.

Public confidence in the 7.3 billion euro investment has recently been severely shaken, after a series of information came to light that neither the investor nor the government had really announced before. Before the public hearing, it became clear, for example, that the area of ​​the battery factory will be ten times larger than what was known so far, and the size of the site in its final state will reach 221 hectares. The previously known report only mentioned an area of ​​21.8 hectares and only 2,921 workers instead of 9,000 workers, and the figures communicated so far only related to a third of the investment, even in terms of water consumption.