A Shanghai tycoon whose company is under investigation is under
police surveillance, suspected of stock manipulation and tax fraud,
a newspaper reported yesterday.
China Securities Journal, the official newspaper of the
Chinese securities regulator, said Zhou Zhengyi, with a personal
wealth of US$320 million according to last year's Forbes
list, is alleged to use bank loans illegally to invest in stocks
and to conduct corporate restructuring involving his listed
companies.
The 42-year-old Shanghai native, also known as Chau Chingngai in
Hong Kong, is also suspected of issuing fraudulent tax receipts and
overstating revenues through his complex and complicated affiliated
units, the paper said.
Zhou is currently the president of Shanghai Nongkai Development
Group, which actually controls four listed companies in Shanghai
and Hong Kong. He is involved in the agriculture, real estate,
expressway construction, trade and finance businesses.
The two firms listed in Shanghai are property developer Shanghai
Hainiao Enterprise Co Ltd and Daying Modern Agricultural Holdings
Co Ltd. The two in Hong Kong are Shanghai Land Holdings Ltd and
Shanghai Merchants Holdings Ltd.
Nongkai Development Group, which started in 1997 with a registered
capital of 100 million yuan (US$12 million), reported total assets
of 2.33 billion yuan at the end of 2001.
The company, which is believed to have under its umbrella a
complicated litany of subsidiaries, lost 2.25 million yuan in
2001.
At
a press conference held by the Shanghai municipal government on
Tuesday, spokeswoman Jiao Yang said Zhou's Nongkai Group was being
investigated for questionable business operations.
There was no official comment from the company, however a
receptionist at Nongkai denied reports that government officials
were at the offices to check its books.
"I
don't see any person here as you described. Everything is going on
as normal," said the receptionist. She refused to give her
name.
Mo
Yuk-ping, Zhou's wife and chairman of Shanghai Merchants Holdings,
was also questioned by Hong Kong's Independent Commission Against
Corruption.
Reports from Hong Kong said Mo has been freed on bail of HK$10
million (US$1.3 million). But official confirmation was not
immediately available.
Share trading in Zhou's two listed units in Shanghai were suspended
yesterday pending the release of important statements.
On
Tuesday, yuan-denominated Class A shares in Shanghai Hainiao
dropped 4.61 percent to 10.13 yuan and shares of Daying Modern
Agricultural closed 5.26 percent lower at 9.71 yuan.
(Eastday.com June 5, 2003)