A Liaoning businesswoman charged by the United States with conspiring to evade US sanctions against North Korea is a low-profile person and might have been unwillingly dragged into the case, according to people who know her.
Ma Xiaohong, 44, founder of trading firm Dandong Hongxiang Industrial Development, built a thriving business through her ties with senior Pyongyang officials, including one who was executed almost three years ago.
Ma is also linked to a vote-rigging scandal in Liaoning’s legislature, but sources said she was a low-profile businesswoman who was more interested in making money than playing politics.
On Monday, the US Justice Department unsealed criminal charges against the company and four of its executives: Ma, general manager Zhou Jianshu, deputy general manager Hong Jinhua and financial manager Luo Chuanxu. The US Treasury Department also blacklisted the firm on the same day.
A businessperson who knows Ma said Ma had once said that doing business with North Korea was “by no means an easy task”. The source also said Ma could have been dragged into supplying materials for nuclear processing against her will. “Ma worked tirelessly for years before succeeding in growing her business to have a turnover of hundreds of millions of yuan,” the source said.
The source said that at one point “the Pyongyang side” refused to clear a long-standing debt of US$30 million owed to Ma and proposed another deal.
“When Ma kept pressing them for the outstanding money, the North Koreans suggested Ma import chemicals like aluminium oxide for them,” the source said, adding Ma might have not been aware that such chemicals could be used in nuclear weapons.
A joint report released by the Asan Institute for Policy Studies in Seoul and Washington-based think tank C4ADS said Hongxiang supplied aluminium oxide and other materials to North Korea that could be used in processing fuel for nuclear bombs.
Police in Liaoning started investigating Hongxiang for “serious economic crimes” last month, after two US prosecutors visited Beijing to look into Ma and her company’s alleged involvement in North Korea’s nuclear programme.
Ma became involved in cross-border trade in 1996, when a beleaguered North Korea allowed exports of scrap iron and steel in exchange for food.
Guangzhou-based Southern Weekly reported last week that, according to Ma, nearly 10,000 tonnes of scrap iron and steel was sent daily to Dandong on the border with North Korea.
As the trade flourished, Ma founded Hongxiang in 2000, and forged ties with senior North Korean officials.
One of those Pyongyang officials was Jang Song-thaek, the former vice-chairman of North Korea’s National Defence Commission who was executed in December 2013 as supreme leader Kim Jong-un sought to consolidate his power, according to the source.
Ma’s business grew and she won many accolades, including being named as one of Dandong’s 10 outstanding women by the city’s Communist Party committee for her contribution to trade with North Korea.
But a mid-ranking official in Shenyang, Liaoning’s capital, said such titles did not necessarily mean Ma had strong political support at home, saying many officials used the awards as a source of reflected glory.
“As far as I know, Ma does not have a particularly strong political background. She is nothing more than a money-minded businesswoman,” the business source said.
Ma had a reputation in the business community for kindness, the source said.
“Unlike most cross-border traders in Dandong who can be unscrupulous, Ma won admiration from business professionals by helping others whenever they got in trouble in their businesses,” the source said.