Zhou Zhengyi, a former property tycoon in Shanghai, is facing
five new charges, including bribery, embezzlement, and issuing fake
value-added-tax (VAT) invoices，after his three-year imprisonment
that expired in May last year.
His defense lawyer, carrying luggage full of materials, entered
the Shanghai No.2 Intermediate People's Court on October 23,
Caijing magazine reported. The testimony involving a number of
officials and businessmen is complex and expected to last for
several days.
According to the prosecution, starting in 1999 Zhou fabricated
VAT invoices from fraudulent copper cathodes businesses he owned to
cajole billions of bank discounts, according to 21st Century
Business Herald, a Chinese economic newspaper.
An anonymous bank official told the newspaper it was not
difficult for banks to research the credibility of trade conducted
among related companies, but cash flowed to Zhou's Shanghai
real-estate firm, Nongkai Development Group, and its branch
companies despite necessary checks.
Zhou placed his relatives in key positions in his companies,
including accountants and managers, to dictate Nongkai. From 1998
to 2003, nearly 80 firms had been merged into Zhou's consortium.
Forbes listed Zhou as the 11th richest Chinese mainlander in 2002,
with a fortune estimated at US$320 million.
Prosecutors started to conduct their investigation into Zhou's
business in 2003. About a year later, he was sentenced to three
years in jail for fabricating registered capital and manipulating
stock prices.
However, the case turned out to be more complicated after the
Shanghai Municipal People's Procuratorate found evidence of bribery
and issuing fake value-added-tax (VAT) invoices in Zhou's business,
and he was rearrested in January this year.
Also detained were Jin Shanggao (alias), director of capital
settlement centers of three stock exchanges in succession; Jiang
Fangyuan (alias), deputy director from the credit department of a
state-owned bank in Shanghai; Qi Guorong (alias), manager in the
international department of a state-owned bank in Shanghai, the
21st Century Business Herald reported. According to the report,
Zhou bribed Jin, Jiang, and Qi to help him embezzle funds and
borrow loans, with luxury watches, houses and money totaling
millions of yuan.
His bribery also reached administrative officials. Huang Jian, a
prison warden, helped Zhou send letters to Hong Kong when the man
was imprisoned. Huang was sentenced to 11 years in jail on August
10, for receiving bribes totaling 450,000 yuan (US$60,358). Yu
Jinbao, Wang Zhengming, and Fu Kehu, members from the investigation
group of Zhou's case, were sentenced to terms of 2-11 years in the
same month, the newspaper reported.
Zhou and his wife Mao Yuping started their business in the
1980s. Their stewing-food restaurant made them a large sum to
speculate in the stock markets. They raked in millions in Hong
Kong's rebounded stock market in 1997 and invested it in the real
estate market.
Mao was sentenced to 32 months in prison last April by the Hong
Kong District Court on charges of conspiracy and defrauding letters
of credits worth 49 million HK dollars (US$5.8 million).
Shanghai No.2 Intermediate People's Court also completed the
cases of Nongkai's three important figures -- Tang Haigen, Zhai
Shiqiang, and Chen Xunming -- on August 10 this year.
Tang Haigen, brother of Zhou's sister-in-law, was former
president of Hainiao Enterprise Development Co Ltd as well as a
former member of the Shanghai municipal committee of the Chinese
People's Political Consultative Conference. He was removed from the
political advisory body in January this year and was arrested on
charges of embezzlement and bribery, according to Xinhua's
report.
(China.org.cn by Wu Jin November 2, 2007)