STAFF at two companies connected to fugitive businessman Guo Wengui, who is subject to an Interpol “red notice,” have been indicted, according to judicial sources.
On Friday, a procuratorate in the northeast China city of Dalian filed a public lawsuit against several executives and employees of Beijing Pangu Investment Co Ltd on suspicion of duty encroachment and misappropriation of funds.
On the same day, Kaifeng City People’s Procuratorate in central China’s Henan Province initiated a public prosecution against Guo’s Henan Yuda Real Estate Co and its employees on charges of defrauding loans and bill acceptance.
Dalian prosecutors claim that in 2008, the wife of Zhao Yun’an, then chairman of Tianjin Huatai Holding Group Ltd, approached Guo through an intermediary to help bail out her husband.
With Guo’s help, Zhao was granted bail and promised to transfer Tianjin Huatai’s assets to Guo, with Guo taking control of the company.
In July 2008, Guo is said to have instructed Qu Long, a defendant in the case and a former Tianjin Huatai executive, to transfer more than 400 million yuan (US$60 million) to companies controlled by Guo for Guo’s personal use.
In order to keep the 400 million yuan, in 2012 Guo persuaded Gao Song, Ma Nan and Cheng Xiuhua, all former senior managers with Beijing Pangu, to forge a series of agreements and memorandums and file a false civil court action, according to prosecutors.
Thus, Guo transferred liabilities worth more than 400 million yuan to Zhengzhou Haohang Co, which has no loan repayment capacity, so he could pocket the money.
Qu is accused of taking advantage of his posts to misappropriate a huge amount of corporate funds, while the other three defendants are accused of duty encroachment for actively assisting Guo’s illegal seizure of Tianjin Huatai’s capital.
The procuratorate in Henan Province claims that in 2008, Guo directed Ma Cheng, Zhang Xincheng, Guo Lijie and Xiao Yanling, all former senior staff of Henan Yuda, to fraudulently obtain loans and bill acceptance totalling 1.5 billion yuan from seven banks by setting up shell companies and fabricating contracts and projects.
Part of the money was used to clear the debts of Henan Yuda, while the rest was transferred to Beijing Pangu or overseas. More than 213 million yuan has yet to be recovered.
The Dalian procuratorate say that three employees with Beijing Pangu are suspected of destroying accounting evidence on Guo’s instructions.
Guo Wencun, Ma Cheng and Sheng Ruigang are said to have destroyed accounting documents, books and reports of the Beijing Pangu international hotel between 2008 and 2013 to prevent inspectors from detecting corruption.
On Friday, three former members of Beijing Pangu Investment Co were given prison terms for fraudulently obtaining loans and foreign exchange.
The company’s senior executive Lu Tao was sentenced to two years and three months, while employees Xie Honglin and Yang Ying were both sentenced to two years suspended for three years, by the People’s Court in Dalian’s Xigang District.
The company was also fined 245 million yuan.
Friday’s trial was the first in a series of cases involving Beijing Pangu Investment Co and Beijing Zenith Holdings.
China’s foreign ministry confirmed in April that Interpol had issued a red notice for Guo Wengui, 50, who is believed to be hiding out in the United States.