At the same time Mr. Biden was trying to help CEFC expand, he was advising a wealthy Romanian facing legal troubles and trying to unload property assets. Gabriel "Puiu" Popoviciu turned to Mr. Biden for legal and business advice when a corruption conviction threatened his real-estate empire, and a person familiar with the situation says the pair met a few times a year over champagne at a high-end Bucharest club, Loft Diplomat.
Another Chinese businessman who had feted Mr. Biden was Beijing financier Jonathan Li, founder of private-equity firm Bohai Harvest RST (Shanghai) Equity Investment Fund Management Co. Mr. Biden had been an unpaid director of BHR from its inception in 2013 when plans called for it to target U.S. investments, though his lawyer and others involved have previously said he had virtually no role.
Then in October 2017, Mr. Biden joined Mr. Li as a shareholder in BHR, according to regulatory filings in China. BHR was funded by Bank of China Ltd. and other big government financial firms. By then, BHR had been part of at least 10 major acquisitions, initial public offerings and other deals that pushed its assets above $1 billion. Still, the cost for Mr. Biden's 10% stake, at $420,000, was based on BHR's startup value in 2013, filings show. Of that, at least a third was provided in the form of loans from other BHR principals, according to people familiar with the situation.
After a BHR-invested company, lithium-battery giant Contemporary Amperex Technology Ltd., went public on the Shenzhen Stock Exchange in June 2018, a portion of IPO proceeds due to Hunter Biden was credited instead toward repaying the debt and went to a principal at the private-equity firm. The principal named Wang Xin confirmed the arrangement and said the lending was "perfectly legal, reasonable, and as far from corruption or any of the suggested fallacies as the sun is far from the earth."
Chinese IPOs are highly sought after and are routinely a one-way bet for those who get a so-called cornerstone slice, as BHR did with shares in CATL, valued at $28 million the day it went public. Shareholders, including Mr. Biden, profited when CATL stock surged from there by the maximum 44% in the debut session, and kept going afterward.
A statement released by Mr. Biden's lawyer last year said Mr. Biden "has not received any return on his investment" in BHR.
The international activity coincided with personal and financial challenges for Mr. Biden.
Mr. Biden had been discharged from the Navy reserves when he failed a drug test in 2014, and in 2017 divorce proceedings, Mr. Biden's ex-wife Kathleen Buhle Biden claimed the couple owed a tax debt of at least $313,970. Her filing said they had maxed out credit cards and taken out double mortgages on their properties, accusing Mr. Biden of spending extravagantly, including over $120,000 in one two-month period. Public records show several tax liens placed against him in recent years, with some satisfied and one withdrawn.
The SinoHawk venture never got off the ground. But starting in August 2017, entities linked to CEFC's Mr. Ye executed the wire transfers listed as covering legal and advisory costs totaling $4.79 million to Mr. Biden's Washington law firm, Owasco PC, according to the Senate Republicans' report. The transfers also covered over $100,000 for bills on credit cards issued to Hunter, James and James's wife, Sara Biden, the report said.
The Journal has reported that government investigators zeroed in on Hunter Biden in response to suspicious-activity reports by a bank in the U.S. that handled foreign transactions for him. In their investigation, Senate Republicans requested suspicious-activity records from the Treasury Department.
The Justice Department has declined to comment on the matter, which is being handled from the U.S. attorney's office in Delaware.
By the time Hunter Biden pledged in October 2019 that he wouldn't serve on any foreign board of directors if his father were elected, he had already stepped down from Ukraine's Burisma. CEFC had virtually collapsed. Mr. Ye had disappeared more than a year earlier following the prosecution in New York of one of his deputies on corruption charges.
Mr. Biden's October 2019 statement, issued through his lawyer, Mr. Mesires, stopped short of promising he would divest foreign holdings. Corporate records in China suggest he hasn't.
A Delaware-registered corporation, Skaneateles LLC, controlled by Mr. Biden, still owns 10% of the Chinese private-equity firm BHR, the records show. A sale of Mr. Biden's BHR stake is possible but complicated by the difficulty of valuing the firm's holdings of unlisted assets. A person close to BHR says the international scrutiny Mr. Biden's involvement has drawn has limited the company's deal making.
"We didn't know what kind of lightning rod he would be," the person said.
--Valentina Pop in Brussels, Elisa Cho in New York and
Xie Yu
in Hong Kong contributed to this article.
Write to James T. Areddy at james.areddy@wsj.com and Andrew Duehren at andrew.duehren@wsj.com
(END) Dow Jones Newswires
12-22-20 1929ET
