Matt Levine’s Money Stuff: Owning Chinese Companies Is Hard

Didi VIEs

In my old life, I was a derivatives structurer at an investment bank, and an experience that I frequently had was getting calls like this:

Relationship banker: Our client wants to do ______.

Me: That’s illegal.

Relationship banker: Yes that’s our problem.

Me: Ah.

Relationship banker: We were hoping there was a … derivative?

Sometimes there was! If you came to me and said “our client would like to buy 8% of a public company, but not disclose her ownership,” I would say “well, under U.S. law you do have to disclose that level of stock ownership, but ...