Former Shanghai tycoon, Zhou Zhengyi, has been charged with
bribery and forging VAT (Value Added Tax) receipts just months
after finishing a three-year prison sentence, local authorities
said Sunday.
Zhou, former president of Shanghai-based property firm Nongkai
Development Group, was released from prison in May after completing
a three-year sentence for fraud and manipulating the stock
market.
But five months later, in October, Zhou was detained as
prosecutors found fresh evidence of crime and was he arrested by
the municipal procuratorate on Sunday. A further investigation into
his affairs is underway.
Zhou, 45, who started business as a teenager in a wonton noodle
shop and graduated to number 11 on Forbes' list of the 100 richest
mainlanders, was the majority shareholder of the Hong Kong-listed
Shanghai Land Holdings and Shanghai Merchants Holdings. In 2002
Forbes estimated Zhou's wealth at US$320 million.
Also known as Chau Ching-ngai, he was convicted and sentenced at
the Shanghai No. One Intermediate People's Court in June 2004 for
falsifying registered capital reports and share price
manipulation.
Zhou was sentenced to two years and six months for manipulating
share prices and one year for falsifying registered capital
reports. In total he was sentenced to three years in prison,
according to the verdict of the Shanghai Number One Intermediate
People's Court.
Nongkai Development Group was ordered to pay a total fine of 40
million yuan (US$5.12 million). This included 33 million yuan
(US$4.23 million) for manipulating share prices and seven million
yuan (US$0.89 million) for falsifying registered capital
reports.
According to the verdict, from June 1999 to May 2003, Zhou was
found manipulating stock prices by illegally buying and selling
tradable shares in an engineering company in east China's Xuzhou
city. He owned 95.93 percent of the company's corporate shares at
the peak and there was a huge leap of 402 percent in the stock's
price.
From October 1998 to April 2000 Zhou was also accused of
fabricating Nongkai's paid-up capital from the original 100 million
yuan (US$13 million) to 800 million yuan (US$102.5 million) with
falsified capital surplus.
In 2002 the Nongkai group, with 4,000 employees, earned US$540
million in sales and paid US$12 million in taxes.
Nongkai has four holding companies listed in Shanghai and Hong
Kong--the Hainiao Development Ltd., Yingxiong, Shanghai Merchant
and Shanghai Land.
Over the past three years Nongkai's three companies have sold
their shares or stopped trading in the stock market. Zhou and
Nongkai hold 26 percent in shares of Hainiao.
Zhou's wife, Mao Yuping, was sentenced to 32 months in prison
last April by the Hong Kong District Court on charges of conspiracy
in the use of fraudulent letters of credit worth HK$49 million
(US$6.3 million).
Mao, 43, was charged by the Independent Commission Against
Corruption on 12 counts of conspiracy to defraud using letters of
credit worth more than HK$49 million which were based on bogus
business transactions.
Others involved in Zhou's case include Tang Haigen, brother of
Zhou's sister-in-law. Tang, former president of Hainiao, played an
important role in Zhou's business affairs.
Tang, a former member of the Shanghai municipal committee of the
Chinese People's Political Consultative Conference, was removed
from the political advisory body last October after criminal
investigations were launched into his affairs. Tang, 49, has been
arrested on charges of embezzlement and bribery.
(Xinhua News Agency January 22, 2007)