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Trial starts for China's once-richest man
By WANG HUAZHONG (China Daily)
Updated: 2010-04-23 07:38
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Huang, former chairman of Gome Electrical Appliances Holdings, was detained in November of 2008 for suspected stock market manipulation. An investigation later exposed a number of high-ranking officials who have also been detained or prosecuted.
The procuratorate in Beijing on Thursday charged Huang with illegal foreign exchange trading via Hong Kong in 2007 and insider trading of Shenzhen-listed Zhongguancun stocks.
The procuratorate also accused Huang of offering bribes of 4.56 million yuan ($667,600) to a number of officials.
All the charges, if proven, could put Huang behind bars for 10 to 15 years, legal experts said.
The charge of corporate bribery would also impose a huge fine on the company if proven.
Founder and biggest shareholder of the Hong Kong-listed company Gome Electrical Appliances Holdings, Huang, 41, was born into a poor family in Fenghu village in South China's Guangdong province.
He started in the home appliance business at the age of 17 and ranked top on Hurun's China Rich List from 2005 to 2008. In 2008, his assets reached 43 billion yuan.
Thursday's trial at the Beijing No 2 Intermediate People's Court attracted dozens of reporters and cameramen, but the first reporter waiting in line was told all tickets for the courtroom, which has 30 public seats, had been given out.
According to a previously released indictment, from September to December 2007, Huang channeled 800 million yuan to Hong Kong, where the money was exchanged by individuals rather than legitimate exchangers into HK$ 822 million.
One of the individuals, Zheng Xiaowei, is niece of Lian Chao, who is dubbed a casino mogul on the high seas.
The charge of illegal business dealing, a crime that carries a five-year jail term and a fine of up to five times the illegal earnings, had seriously disrupted market order, according to prosecutors.
About the charge of insider trading, the indictment said that in 2007 Huang ordered others to buy substantial shares of the Shenzhen-listed Zhongguancun stocks on two occasions prior to the company's reconstruction activities with another company Huang also owned.
The two purchases of 9.76 million shares and 10.04 million shares generated profits on the books of 3.48 million yuan and 306 million yuan respectively after the announcement of the reconstruction, according to the indictment.
Huang is also accused of corporate bribery for allegedly asking his subordinate, Xu Zhongmin, to bribe police and taxation officials.
Xiang Huaizhu, former deputy director of the economic crime investigation bureau of the Ministry of Public Security, reportedly accepted 1.06 million yuan to fix cases connecting Huang's companies.
Moreover, Sun Haiting, former director of State Administration of Taxation's inspection bureau, allegedly accepted 1 million yuan and two other Beijing local taxation officials took 500,000 yuan each to address Gome's tax issues.
Jin Hongli, a police official from the economic investigation division of the Beijing municipal public security bureau, also received 1.5 million yuan from Xu, the indictment said.
A number of other police officials, including Zheng Shaodong, assistant minister of public security, and Guo Jingyi, former inspector of the Ministry of Commerce, have either been investigated or prosecuted for accepting Huang's money.
Huang's reaction to the accusation was not available.
Gome announced in March that it did not find any embezzlement of corporate funds or assets used to bribe officials as stated in the indictment, suggesting the bribery was an individual's move.
"Huang's case revealed loopholes that China ignored while concentrating on its economic growth," wrote the official Xinhua News Agency shortly after Huang's arrest.
The share price of GOME fell 1.1 per cent to HK$ 2.69 on Thursday, with noticeable shrinking in daily turnover.
