Gu Chujun, the former chairman of refrigerator giant Guangdong
Kelon Electrical Holdings, was yesterday jailed for 12 years and
fined 6.8 million yuan ($945,000) for misappropriation, graft and
other crimes, the China News Service reported.
Gu was found guilty by the Foshan Intermediate People's Court in
Guangdong province, of misstating registered capital and illegally
disclosing important financial information, among other crimes.
However, the court said there was insufficient evidence to prove
Gu had abused his position for personal gain, as charged by Foshan
procurators.
The controversial entrepreneur, who founded refrigerator company
Greencool in the early 1990s and acquired Kelon, China's biggest
refrigerator-maker at the time, in late 2001, was detained at the
end of July 2005.
Gu and eight senior executives of Greencool and Kelon were later
arrested.
Judicial investigations showed Gu had asked a number of the
defendants to generate fraudulent profits for Kelon between 2002
and 2004, by exaggerating losses incurred in 2001, hoarding goods
and falsifying raw material sales to avoid the delisting of Kelon
from the stock market.
The fraudulent financial reports caused serious losses for
individual shareholders in the company as well as public investors,
the court said.
Criminal investigations also found that Gu had embezzled a total
of 313 million yuan.
As Gu has already been in jail for two years, he has just 10
years left to serve, the report said.
His lawyer told media he will appeal.
One of the eight other defendants in the case, Jiang Baojun, a
former financial supervisor of Kelon who was accused of abusing his
position for personal gain, was acquitted.
The other seven were sentenced to jail terms of between one and
four years, the Xinhua News Agency reported yesterday.
Before his arrest, Gu built his business empire by controlling
five listed companies: Greencool, Kelon, Hefei Meiling, Xiangyang
Automobile Bearing and Yangzhou Yaxing Motor Coach.
(China Daily January 31, 2008)