Key figure in fund scandal gets 19 yrs

(China Daily)
Updated: 2008-04-08 06:34

SHANGHAI: Zhang Rongkun, a major player in Shanghai's social security fund scandal, was sentenced to 19 years in prison Monday at Songyuan Intermediate People's Court in northern Jilin province, Caijing magazine said on its website.

Zhang said he will appeal.

The 39-year-old was convicted of giving government employees more than 29 million yuan ($4.1 million) to acquire profits for his two companies: Feidian Investment Co Ltd and Fuxi Investment Co Ltd.

Zhang Rongkun

Wang Weigong, the former secretary of late Vice-Premier Huang Ju, had received more than 9.3 million yuan from him.

Wang helped Zhang approach Shanghai's former Party chief Chen Liangyu. From Chen, Zhang received preferential treatment and funding for highway construction contracts.

Previous reports said Zhang and his companies had also bribed the former director of the Shanghai labor and social security bureau Zhu Junyi and his family with money, gold and gifts worth 1.3 million yuan.

In 2003, Zhang received 200 million yuan, which was embezzled from the city's social security fund, and invested the money in Feidian Investment.

Last month, Wang was stripped of his positions in the Party and State-owned firm Shenergy. Chen Liangyu is on trial in Tianjin.

Authorities also confiscated from Zhang assets worth more than 1.3 billion yuan and his firms were each fined 282 million yuan.

He earned the 1.3 billion yuan by manipulating stock trading of State-owned Haixin Group and investing in the Hong Kong stock market with money he embezzled from the State-owned Shanghai Electric. He pulled off the manipulation with Haixin Group's chairman and the board secretary by giving bribes worth a total of 1.7 million yuan. It has not been revealed to whom he gave the money.

Also, in 2005, he worked with two senior managers in his companies - Wang Yongde and Zhangjun - to illegally issue bonds.

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