Former D'Long executive convicted of illegal fund raising
(Xinhua)Updated: 2007-02-16 15:23 Zhang Yeguang, one of the executives in the bankrupt D'Long business empire, has been proved guilty of illegal fund raising but was only given a jail term of four years, plus a fine of 300,000 yuan (US$37,500).
In a ruling handed down recently by the Intermediate
People's Court of Wuhan City, Central China's Hubei Province, the court said
leniency was shown in meting out the penalty to Zhang with consideration that he
had surrendered himself to the police.
The court was told Zhang served four posts of being a member on the board of directors with both the D'Long (Group) Co Ltd of Xinjiang Uygur Autonomous Region, and D'Long International Strategic Investment Co (ISIC), managing director with Shanghai Youlian Management Research Center Co Ltd, as well as legal representative of Deheng Securities Co Ltd.
Beginning from late 2000, in order to cope with repayment crisis faced by Jinxin Trust, a fund company, in trust financial business, Zhang Yeguang, together with other decision-makers of D'Long, including Tang Wanxin, founder of D'Long and also then president of D'Long ISIC, decided that D'Long ISIC should buy over more financial companies in a bid to hike up the volume of business, and a new company should also be set up to exercise a unified administration and facilitate pooling of savings deposits.
From June 2001 to August 2004, Shanghai Youlian, the new company set up thereafter, organized a host of fund companies, including Jinxin Trust and Deheng securities, to raise 43.7 billion yuan by signing 32,000 pieces of agreement for trust investments with unspecific clients, of which, 16.7 billion yuan could not repaid.
After D'Long's financial scandal surfaced in May 2004, Zhang sneaked overseas and fled into hiding. Claiming having been traumatized by psychological pressure, Zhang returned to Hong Kong from Thailand on July 31, 2006, then traveled to Guangzhou, a city in South China's Guangdong Province, and took a train from there on August 1 to Wuhan and surrendered to the local police upon his arrival in the following day.
The court reckoned that Shanghai Youlian ordered financial companies under it to pool savings from unspecific clients of the society by promising guarantees such as preserving capital and fixed rate of return and was guilty of illegal fund raising.
Being the managing director and also a member on the board of directors with Shanghai Youlian, Zhang took part in drafting the detailed plan for the illegal fund raising, helped Tang Wanxin organize and offer guidance to different financial organizations to carry out the illegal fund raising.
As the legal representative of Deheng Securities, Zhang was directly responsible for illegal fund raising of the fund company.
"Zhang should be punished accordingly for being one of the key decision makers and organizers for the illegal fund raising of D'Long and its cooperation partners," said the court ruling.
Tang Wanxin, together with six other senior executives of D'Long, was convicted early last year. Tang was given an imprisonment of eight years.
(For more biz stories, please visit Industry Updates)