In late December 1999 Li Yonghui, a 37-year-old businessman, walked out of a military-detention facility near Beijing and onto a plane to San Francisco. He had been banned from communicating with the outside world for months and was anxious to see his wife and two young children, who were living in Vancouver. First, though, he wanted to visit an old friend, William Yang.

The men had known each other since 1981, when they had shared a cramped dormitory at Tianjin University, where they both studied laser physics. After their studies, their paths had diverged. Yang had emigrated to Fremont, a coastal city in California, where he became a successful entrepreneur in the field of photonics. Li had moved back to his hometown of Shijiazhuang, the capital of Hebei province in northern China, and set up his own truck-leasing business, Kaiyuan Auto Trade.

Although private enterprise was on the rise in China in the mid-1990s, the state continued to dominate; ambitious businesspeople felt they had to get close to local politicians to thrive. In 1998 a state-owned firm in Shijiazhuang called International Building asked Kaiyuan for a capital injection. It was a crummy deal for Li in financial terms: the state firm paid next to nothing for a 50% stake in Kaiyuan, and Li got a 19% stake in International Building for a much higher cost. But Li was excited by the doors it could open for him: according to BusinessWeek, which covered the saga, International Building was backed by two powerful local politicians, the deputy governor of Hebei, Cong Fukui, and the mayor of Shijiazhuang, Zhang Erchen.

Soon after signing the contract, however, Li discovered irregularities in International Building’s books. He hatched a daring plan to save his company without backing out of the deal. Gradually, he bought up minority stakes in the state firm until he gained majority control—that way he could clean up the company himself. But when local authorities realised what he was doing, they detained him.