Sigrún Davíðsdóttir's Icelog

Search Results

The Lopapeysa is not enough – Huang Nubo has no convincing foreign enterprises to show

with 5 comments

In a document, seen by Icelog, sent to the Icelandic Government to underpin his project of investing up to $200m to build a highland resort at Grimsstadir in Iceland, the Chinese entrepreneur Huang Nubo mentions his first ties to Iceland: as a student he became friends with an Icelander and so warm was the friendship that the mother of his Icelandic friend knitted a lopapeysa (a typical Icelandic sweater, made from Icelandic wool in natural colours). This friend, Hjorleifur Sveinbjornsson, later married Ingibjorg Solrun Gisladottir, the leader of the social democrats 2005-2009 and minister of foreign affairs 2007-2009 – and Sveinbjornsson has been one of Huang’s ardent advocates in Iceland.

Huang Nubo is now mightily upset with the Icelandic government for not embracing his plans. According to the FT (subscription only), Huang sees this as a racial discrimination. “I think this is racial discrimination because I am Chinese,” he told the FT. “Many people have invested in Iceland in the past but no one has been treated like I have.”

This isn’t entirely true. There are serious restrictions to foreign investment in Iceland, especially when it comes to investment from outside the EU/EEA. Icelanders tend to be suspicious towards foreign investment. Ia a Canadian company, investing in energy in Iceland, at the time called Magma, now called something else, ran into similar problems, as explained earlier on Icelog. Magma found a way around this by setting up a company in Sweden. This caused hefty debate in Iceland, the investment was accepted – incidentally, this investor seems to have lost interest in Iceland, as sometimes happens.

The serious problem with Huang as an international investor is that he has nothing to show outside of China. The properties and companies he owns in the US are nothing to speak of, in terms of operations and having done something substantial. When he seemed to be losing the bid to invest in Iceland he turned his attention to Denmark, was interviewed there but again, just words and nothing seems to be moving there.

Another problem is the inconsistency in his intentions, which he has aired. He said he would fund it all himself, out of his own pocket and that wouldn’t be a problem. One day, he announced he would fund the Grimstadir operations by selling 100 Grimsstadir luxury dwellings to rich Chinese. It seemed to have escaped his attention that due to restrictions on nonEU/EEA owning property in Iceland this plan would make things very complicated. When I inquired about this with his Huang’s spokesman in Iceland this seemed just one idea out of many.

And this seems to have been a problem all along. There were many ideas and not concrete plans. So far, no independent due diligence has been done by Icelandic public sector entities, negotiating with Huang. All the information worked on comes from Huang himself. In that sense, these entities have not done a convincing job in securing public interest at stake here.

Huang Nubo makes much of the fact that he is a poet. Unfortunately, when it comes to business poetic visions aren’t substantial enough to bank on.

*A link to earlier Icelogs on Huang.

Follow me on Twitter for running updates.

Written by Sigrún Davídsdóttir

December 10th, 2012 at 4:20 pm

Posted in Iceland

The cartoon news version of the Huang Nubo story (updated)

with one comment

NMA tv is a *Chinese website that specialises in cartoon versions of news stories. They have their own cartoon take on the Huang Nubo story that you can watch here.

*As pointed out in the comments, NMA is Taiwanese, not Chinese – and that adds a twist to this story. Thanks for the comment.

Follow me on Twitter for running updates.

Written by Sigrún Davídsdóttir

December 1st, 2011 at 10:54 am

Posted in Iceland

A ministerial ‘no’ to Huang Nubo

with 4 comments

Minister of Interior Ogmundur Jonasson has refused the Chinese enrepreneur Huang Nubo the right to buy the big plot of land, Grimstadir a Fjollum, that he had his eyes on. As reported on Icelog earlier, the sale was a hot topic in Iceland.

Jonasson, from the Left Green party, seems to have angered his coalition partner, the social democrats. Minister of Economy and Trade Arni Pall Arnason said this weekend that this was a test for the coalition. Other leading social democrats have also expressed anger and irritation. Jonasson has already expressed his doubts. The answer hardly comes as a great surprise.

Nubo’s Icelandic plans have attracted great attention in the international media, ia the FT which yesterday had the latest development in the Nubo case on its front page, as has been the case with the paper’s earlier reporting. This interest indicates the focus not only on Iceland but on Chinese ventures abroad.

In my Ruv reporting I have pointed out that Nubo, though portrayed as one of China’s dollar billionaires, has no business ventures outside of China that indicate his ability to develop the huge tourism plans he seemed to have in mind for Grimstadir. His main foreign ventures are in the US where he ia owns a plot of land, plans to build a shopping mall, but hasn’t had the money, because of the crisis, to commence. He is also developing tourist fascilities at a ranch in Nashville. Due to opacity in the Chinese business environment, Nubo’s ventures are yet another example of how difficult it is to ascertain the real standing of Chinese companies.

Follow me on Twitter for running updates.

Written by Sigrún Davídsdóttir

November 27th, 2011 at 1:03 pm

Posted in Iceland

New Zealand worries over Chinese investment in dairy farms

with 2 comments

Icelandic authorities recently vetoed the sale of land in the Icelandic inland to a Chinese billionair, Huang Nubo. That case is indeed still milling on. The latest is that the adjacent municipalities are exploring the possibility of buying the land, with a loan from Nubo, to rent it out to Nubo.

But it’s not only in Iceland that Chinese investment is met with some skepticism.

This week, the High Court in New Zealand halted a planned sale of dairy farms to Chinese investors. The reason for the ruling is that the High Court claims the New Zealand government overstated the economic benefits the Chinese investment would bring when it allowed the sale some 16 months ago. The ruling isn’t prohibiting the sale per se but puts onus on the government to review the evaluation with stricter criteria. The court case was brought by some Australian farmer and a banker who were outbid by the Chinese investor.

It’s all familiar to Icelanders: the supporters of the sale say it brings much needed foreign investment into the dairy sector that’s anything but prosperous. Those against it says it runs against Australian interests to sell farmland. Quite interestingly the buyer in spe is a company run by a property developer called Jiang Zhaobai. As in the case of Nubo’s company property in China is notoriously difficult to evaluate.

*Previous Icelogs on the Nubo sale are here and here.

Follow me on Twitter for running updates.

Written by Sigrún Davídsdóttir

February 16th, 2012 at 7:04 pm

Posted in Iceland

Chinese interest in Iceland (updated)

with 24 comments

The FT dedicates a front-page article today to a Chinese property billionaire, Huang Nubo, who wants to buy the largest single farmland in Iceland, Grimstadir, for a major development of all-year tourist facilities and a hotel. He is also planning to build a bigger hotel in Reykjavik, though he hasn’t yet secured property or land there. The two hotels will be linked by his own air company, another angle to this grande scheme. Nubo has offered 1bnISK (€6m) for the land, saying he plans to invest further 20-30bnISK (€120-180m) in the project.

Nubo’s Icelandic connections go back to his student years, when he had an Icelandic friend. He has lately cultivated his Icelandic connections and taken some Icelandic friends to the North Pole. One of his Icelandic friends is married to the former leader of the Social democrats, former minister of foreign affairs Ingibjorg Solrun Gisladottir. This friend of Nubo is also closely related to the present minister of foreign affairs Ossur Skarphedinsson.

Huang Nubo worked for the Chinese communist party, was an official until he emerged as the owner of Chinese properties in 2003. His company, Zhongkun Group, owns properties in China, resorts and tourist facilities. His company website indicates that most of this is still no further developed than to the computer picture stage.

Lately, his interests have been turned to the US but a planned project in Tennessee hasn’t materialised. Now he seems to have his attention turned to Northen Europe, Iceland first and foremost, inspired by his love of and interest in nature and poetry. One article states he has invested 1m yuan (€108,000) another mentions $1m in ‘China-Iceland Culture Fund,’ a noticeable sum in Icelandic culture life that has so far, as so many of Nubo’s other projects, has failed to reach the tangible state.*

He is also said to be one of the largest shareholders in Royal Business Bank, an American-Chinese bank, investing $1m. Unfortunately, the bank’s website gives no indication of who the shareholders are but this allegedly largest shareholder doesn’t sit on the board of the bank. The bank was set up in 2008 with a capital of $71m.

The leader of the Progressive party, Sigmundur David Gunnlaugsson whose constituency would benefit from the Chinese enterprise, has welcomed the investment, saying it really doesn’t matter if the investor is French, German or Chinese. Svandis Svavarsdottir environment minister says that big plans need to be carefully scrutinised. Prime minister Johanna Sigurdardottir says that investors like Huang Nubo is just what Iceland sorely needs. With strong regulations, that Iceland has, according to Sigurdardottir, there is nothing to afraid of.

This Chinese interest in Iceland is one of several Chinese projects under discussion in Iceland. China plans to build a huge embassy, indicating that its interest must be for something more than just normal diplomatic relationship. A Chinese research institution is exploring the viability of building an unmanned research station, in addition to its station in the Antarctica, to investigate the Northern lights. In addition, there is great interest in China for the sea route through the ice cap around the North pole.

Only foreigners from the EEA can buy land in Iceland, which means that this matter has to go through official channels in Iceland.

Icelandic politicians must now decide whether and to what extent Iceland should welcome Chinese investors. Investors from a country where no one is rich unless deemed worthy by the Chinese Communist Party and its officials. A country that is avidly seeking investments abroad though at the same time foreign investment in China is a tortuous process. That’s the fundamental difference between investors from, say EU countries, and from China. A difference much noted in Africa where Chinese investors have invested vast sums in land, mining and infrastructure.

In case, Icelandic politicians haven’t noticed, the questions asked everywhere in democratic countries is if politicians and business leaders are content with dancing to the Chinese flute or if they think pressure should be exerted on the Chinese to open China to foreign investments, ia. by improving fundamental rights such as human rights and rights of private property.

*This is wrong. The money has materialised, is held by a fund in China, which sponsored a poetry festival in Iceland last year. The next festival, now in autumn, will take place in China.

Follow me on Twitter for running updates.

Written by Sigrún Davídsdóttir

August 30th, 2011 at 1:38 pm

Posted in Iceland