CHENGDU: Zhou Yiming, the youngest tycoon on Forbes magazine's list of
China's 400 richest people last year, was sentenced to life imprisonment on
Friday in Suining in Southwest China's Sichuan Province.
"The Suining Intermediate People's Court announced the verdict this (Friday)
morning on the charge of contractual fraud," said Tan Shengbin, director of the
court's general office.
Zhou had accepted the charges against him and did not say whether he would
appeal to a higher court, Tan told China Daily.
Zhou, a 32-year-old businessman, had been arrested after he acquired nearly
US$69 million through his stake in Sichuan Mingxing Electric, a major supplier
of water, electricity and gas to 3.8 million residents in Suining.
The case began in August 2002, when Sichuan Mingxing Electric, a listed
company, decided to sell shares worth 380 million yuan (US$48 million) a 28 per
cent stake in the firm on the stock market.
At that time Mingxing Electric had 100 million yuan (US$13 million) in
capital and no debt, making it an attractive target for investors, including
Zhou, chairman of the Shenzhen Minglun Group Ltd, an electronics and food
In 2003, Zhou paid 110,000 yuan (US$13,900) to Shenzhen Zhongxi Accounting
Company to help him forge an audit of his personal finances. The fake reports
inflated Shenzhen Minglun Group's net assets in 2002 to 1.2 billion yuan (US$152
million), although the company had actually been in debt to the tune of 280
million yuan (US$35 million) at the time.
Zhou used the fake reports to borrow 380 million yuan (US$48 million) from
three banks, which he then used to acquire the 28 per cent stake in Sichuan
The court held that Zhou began to siphon capital from the Sichuan company
after he gained control, acquiring nearly US$69 million with the help of several
accomplices and causing the company to suffer huge financial losses.
Forbes last year ranked Zhou as 207th among China's 400 richest people, with
a personal fortune estimated at US$121 million. According to the Guangzhou-based
Nanfang Daily, despite their growing wealth, the richest people on the Chinese
mainland paid less tax in 2006 than the year before.
A report on the newspaper's annual list of the mainland's wealthiest people
revealed that the personal assets of the 120 entrepreneurs were worth on average
2.062 billion yuan (US$2.6 million), an increase of 202 million yuan (US$26
million), or 10 per cent, compared to last year.
However, they only paid average taxes of 270 million yuan (US$35 million),
compared with 283 million yuan (US$36 million) in 2005, the newspaper