Disgraced financier gets life sentence for fraud, illegal fundraising
Kong Xiangyou, the disgraced former head of Jingyi Group, an investment and asset management company, was sentenced to life behind bars and permanently deprived of his political rights for fraud and illegal fundraising involving over 13 billion yuan (US$1.85 billion), a Shanghai court said on Thursday.
Jingyi was fined 21 million yuan for illegally absorbing public deposits, fraud and illegally raising funds, the Shanghai No.2 Intermediate People's Court said, adding that Kong was also fined 10 million yuan.
Jingyi was established in 2011 in Putuo District. Zhou Haisheng acquired the business and established the Renyu Asset Management Corporation in 2014, the court said.
From August 2014 to February 2015, suspects from the two companies advertised investment vehicles promising annual interest rates between 8.4 and 16.2 percent without government approval. Over 250 million yuan in public deposits were illegally absorbed from nearly 1,600 people, court authorities said.
Starting in December 2014, the two companies came under the control of Kong, who was aware of the illegal activity and knew that the majority of investors would not be compensated, the court said.
In 2015, Kong established another company. The three businesses under Kong's control sold many illegal and fake investment products to investors. The scale of illegal fundraising eventually reached over 13 billion yuan from more than 27,000 people, the court said.
The court added that the money was used for payment of capital and interest (8.9 billion yuan), company operations (1.5 billion yuan), investment (2.2 billion yuan) and Kong’s personal spending (300 million yuan).
In 2018, Kong surrendered himself and other nine people were arrested. Further investigations and trials of other suspects are ongoing, the court said.
An earlier report said that Kong was sentenced to four years and six months in jail in 2008 in Wenzhou, Zhejiang Province, for theft, police said.