Former richest man gets 14 years in prison

By Wang Jingqiong and Zhu Zhe (China Daily)
Updated: 2010-05-19 07:00
Large Medium Small

Former richest man gets 14 years in prison

Gome founder Huang Guangyu. [file photo]  

BEIJING - Huang Guangyu, once China's richest man and former chairman of home appliance giant Gome Group, was sentenced on Tuesday to 14 years in jail for illegal business dealings, insider trading and corporate bribery.

He was also ordered to pay a fine of 600 million yuan ($88 million) and 200 million yuan of his assets will be confiscated, according to a ruling by the Beijing No 2 Intermediate People's Court.

The court agreed with the procuratorate's charges that Huang had illegally traded in foreign exchange, was involved in insider trading of Shenzhen-listed Beijing Centergate Technologies' stock, and bribed five officials with 4.56 million yuan.

Du Juan, Huang's wife, was sentenced to three-and-half years for insider trading and fined 200 million yuan.

Related readings:
Former richest man gets 14 years in prison Gome's sporting goods chain takes a swing at a home run
Former richest man gets 14 years in prison Ex-Gome's chairman on trial in Beijing
Former richest man gets 14 years in prison Gome expects little impact from founder's criminal trial
Former richest man gets 14 years in prison Gome China unit gets Beijing rap for bribery

Xu Zhongmin, former chairman of Beijing Centergate, who was convicted of insider trading and corporate bribery, was sentenced to three years and fined 100 million yuan.

The three stood trial on April 22, and the verdict was read out at about 10:30 am on Tuesday. The sentencing was closed to the public and media.

Yang Zhaodong, one of Huang's defense lawyers, told reporters soon after the verdict that Huang was "calm" upon hearing the sentence, but his family, including his mother and two sisters, turned very emotional.

Yang said Huang will meet with his lawyers to decide on filing an appeal.

"Fourteen years is more than what we expected, and I think it's a little too heavy," Yang said.

Gome Group, which was ordered to pay a fine of 5 million yuan for corporate bribery, issued a statement on Tuesday, saying it respects the verdict.

"With the case coming to an end and the company's restructuring complete, Gome Group, with abundant capital and stable structure, will focus on its operations," the statement said.

Former richest man gets 14 years in prison

Gome shares closed up less than 1 percent on Tuesday at HK$2.32 after the sentencing was announced.

According to the indictment, from September to December 2007, Huang channeled 800 million yuan to Hong Kong, where the money was converted to HK$822 million through illegal channels.

As the major shareholder of Beijing Centergate, Huang was found guilty of insider trading of the company's stocks in 2007, with a total value of more than 1.415 billion yuan. The dealings, from April to September, earned him more than 309 million yuan in illicit profits.

Huang was also convicted of corporate bribery for asking Xu Zhongmin to bribe police and taxation officials in whose cases no verdict has been announced. Those involved include:

Xiang Huaizhu, former deputy director of the economic crime investigation bureau of the Ministry of Public Security, stood trial in March on charges of accepting bribes of 1.06 million yuan to fix cases concerning Huang's companies.

Sun Haiting, a senior official with the State Administration of Taxation's inspection bureau, allegedly accepted 1 million yuan, and two Beijing taxation officials 500,000 yuan each.

Jin Hongli, a police official from the economic investigation division of the Beijing municipal public security bureau, received 1.5 million yuan from Xu, the indictment said.

A number of other police officials, including Zheng Shaodong, former assistant minister of public security, have also been investigated for accepting bribes from Huang.

Founder and former chairman of Hong Kong-listed Gome Electrical Appliances Holdings, 41-year-old Huang was born into a poor family in Fenghu village, Shantou, Guangdong province.

He started in the home appliance business at the age of 17 and was named China's richest man in 2004, 2005 and 2008, with an estimated net worth of $6.3 billion in 2008.

He was detained in November 2008 for suspected stock market manipulation and was held until the trial last month.