Two executives of a Chinese privately-owned steel plant were sentenced Friday to five years in prison for tax evasion in the eastern province of Jiangsu, local court sources said.

Dai Guofang, chairman of the Jiangsu Tieben Iron Co. Ltd., and Zhang Xiqing, the company's deputy general manager, were convicted of evading 23.9 million yuan (US$3.5 million) of tax, according to the Changzhou Municipal Intermediate People's Court.

The company was fined 400,000 yuan (US$58,520).

The court said it gave a light verdict as the company had paid back tax before the case was uncovered.

Dai was detained for tax invasion in April 2004, when the case was put in the spotlight. An iron project of the company in Changzhou and Zhenjiang cities was then suspended for being accused of illegal seizure of 436 hectares of land, obtaining loans through forgery and starting construction in June 2003 without approval of local environmental protection department.

The suspension also came when the central government sought to rein in blind investment in a bid to prevent overcapacity and economic overheating.

The project had an expected production capacity of 8.4 million tonnes and a total investment of 10.6 billion yuan (US$1.55 billion).

(Xinhua News Agency April 18, 2009)