Fugitive Guo Wengui's company fined, employees sentenced for fraud

A company of one of China's most-wanted fugitives Guo Wengui has been fined 150 million yuan (US$22.3 million) for crimes of fraudulently obtaining loans and bill acceptance

A company owned by one of China's most-wanted fugitives, Guo Wengui, has been fined 150 million yuan (22.3 million U.S. dollars) for fraudulently obtaining loans and bill financing fraud, according to a court ruling Friday.

Two employees of the Henan Yuda Real Estate Company were sentenced to prison terms ranging from 18 months to two years, with a further employee exempted from criminal penalty, according to Kaifeng City Intermediate People's Court.

The defendants said they committed the crimes under direction from Guo, the "actual controlling shareholder" of the company, who fled China under suspicion of multiple crimes in August 2014. He is currently listed under an Interpol "red notice" for wanted fugitives.

The court said that under instruction from Guo the three employees violated regulations and fraudulently obtained loans and bill acceptance worth a total of 1.495 billion yuan. More than 212 million yuan in loans has yet to be recovered.

Employee Zhang Xincheng fraudulently obtained loans and committed bill financing fraud worth 1.435 billion yuan. Guo Lijie and Xiao Yanling committed bill financing fraud worth 60 million yuan.

Their behavior disrupted national financial management order and jeopardized financial security, the court said.

Zhang, Guo Lijie and Xiao committed the crimes under the instigation of Guo Wengui, the court said, adding that they were accessories to crimes and could be given leniency.

Zhang was sentenced to two years in prison and a fine, for fraudulently obtaining loans and bill financing fraud. Guo Lijie was sentenced to 18 months in prison with a two-year reprieve, for bill financing fraud, and a fine. Xiao was exempted from criminal penalty for voluntarily turning herself in and confessing.

The three defendants and the representative of the company accepted the ruling at the court and said they would not appeal.

Yang Yong, representative of the company, said they deserved the penalty and would learn a lesson from the case and act in accordance with the law in future.

"I have violated the law. I admit my guilt and feel regret. I think the verdict is fair and reasonable," Zhang said.

Guo Lijie and Xiao also expressed deep regret for their crimes and gratitude to the court's leniency.

Transcripts and footage of the session were broadcast by the court's official account on Weibo, a Twitter-like service.

On July 12, the Kaifeng City Intermediate People's Court opened a trial for the company's alleged crimes and those of the three individuals.

The defendants did not object to the evidence and charges, pleading guilty, expressing remorse and thanking judicial organs for the lawful handling of their cases.

According to a court ruling in June, Guo Wengui, also the actual controlling shareholder of Beijing Pangu Investment Company, directed three individuals of Pangu to apply for loans from banks using fake documents.

They received prison terms for fraudulently obtaining loans and foreign exchange. Pangu was also fined 245 million yuan.

Special Reports