A man charged with swindling nearly 1.4 billion yuan (US$170 million) went on trial on Tuesday in Beijing.

The 49-year-old Liu Fuchen managed 10 Beijing-based companies, including Jingdongye Communication Electronics Co. Ltd., Beijing Funite Industry and Trade (Group) Co. Ltd. and Beijing Funite Furniture City, before being arrested in 2003.

He is accused of embezzling 536 million yuan (US$65 million) in treasury bonds, and of taking 670 million yuan (US$81 million) in cash and defrauding 165 million yuan (US$20 million) from banks between 1997 and 1998.

Liu denied the accusations made by the prosecutor at the trial, which is taking place at the capital's No.2 Intermediate People's Court.

Despite being identified as the chief managing officer of the companies, Liu said he was in fact the assistant manager. "I did my work under the instruction of the manager Guan Ronghua," he claimed. "Indeed, I did not know the real condition of the companies at all."

It is expected that the hearing will continue tomorrow due to the complexity of the case, court sources said.

After being introduced by Liu, an office of Beijing Securities signed a contract in 1996 with a Hunan-based stock sales office to act as an agent for treasury bond sales.

According to the contract, all the sales revenue was transferred to Liu's account by Beijing Securities, which received transaction fees, it is claimed.

Liu acquired 446 million yuan (US$54 million) in two installments in this way from 1997 to 1998.

Shi Xinji and Yan Yuqing, managers of the Beijing Securities office, also embezzled another 90 million yuan (US$11 million) from government bond trading with an insurance company.

According to the indictment, that fund was transferred to Liu's account as well.

The public prosecutor said that Liu colluded with Feng Jun, a top official with a branch of China Everbright Bank, in 1997.

Feng illegally transferred 41 installments of savings to Liu's account, amounting to over 670 million yuan (US$81 million), according to the prosecutor.

Liu is also alleged to have asked the Beijing Securities office to provide fake guarantees for five companies operated by him.

Using the guarantees, the defendant swindled a branch of the China Everbright Bank out of 165 million yuan (US$20 million) in 1998, according to the charges.

The public prosecutor said that Liu had committed the crimes of misappropriating public funds and contractual fraud.

(China Daily March 2, 2005)