Zheng Junhuai, former chairman of Inner Mongolia Yili Industrial Group, one of China's largest dairy producers, has reportedly emerged from prison to start a new dairy company in Inner Mongolia, Yili's home turf.

Quoting an unnamed source, the Shanghai-based National Business Daily said that Zheng has raised 4 billion yuan for his new venture in Hohhot, the capital city of Inner Mongolia, China's dairy industry heartland.

Zheng was sentenced to six years in prison in December 2005 for misappropriating public funds. Before his conviction, Zheng was chairman and CEO of Yili Group from May 1993. He was considered one of the most experienced leaders in China's dairy industry. Zheng was released from prison in early September, after his prison terms were twice reduced.