Tycoon sentenced to 14 years in prison

0 CommentsPrint E-mail Xinhua/China.org.cn, May 18, 2010
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 File photo of Huang Guangyu.

File photo of Huang Guangyu. [Chinadaily.com.cn]

Huang Guangyu, former chairman of Chinese electronics retail giant Gome, was sentenced to 14 years in prison Tuesday after being convicted of illegal business dealings, insider trading and corporate bribery. (Video)

At the Beijing No. 2 Intermediate People's Court, Huang was also fined 600 million yuan (88.23 million U.S. dollars) and received an order for the seizure of 200 million yuan worth of assets.

Review of case development 

• May 18, 2010--Huang is sentenced to 14 years in prison and fined 600 million yuan.

• Apr. 22, 2010--Huang goes on trial in Beijing

• Dec. 2009--Huang faces new charges

• Jan. 2009--Du Juan, wife of Huang, is under investigation

• Dec. 23, 2008--Huang is suspended from his post

• Nov. 24, 2008--Huang is detained on share trading manipulation

Huang, also known as Wong Kwong-yu, was once the richest man in China's mainland and the former legal representative of both Gome and Beijing Pengrun Real Estate Development Company. Huang was arrested in 2009.

His two firms, Gome and Pengrun, were fined 5 million yuan (735,000 U.S. dollars) and 1.2 million yuan respectively for giving bribes, the court statement said.

Huang was found to be liable for the bribes given by the two companies as he was personally involved or directed others to do so, said the statement.

Huang was also convicted of illegally trading 822 million Hong Kong dollars from September to November 2007.

As the major shareholder of Shenzhen-listed Beijing Centergate Technologies (Holding) Co., Ltd., Huang was found guilty of insider trading of the company's stocks, with a total value of more than 1.415 billion yuan, from April to September 2007.

These dealings earned him more than 309 million yuan in trading profits.

He directly bribed or instigated others to bribe five government officials with 4.56 million yuan in cash and properties from 2006 to 2008 in exchange for corporate benefits, it said.

The statement said the court found Huang's crimes to be extremely serious, but showed leniency because he had admitted guilt and assisted with the criminal investigation.

Huang, who was detained by Beijing police in November 2008, built Gome Electronics into China's biggest appliance retailer and was listed by the Hurun Report as China's richest man in 2004, 2005 and 2008.

Huang's wife, Du Juan, was sentenced also on Tuesday to three years and six months in prison with a 200 million yuan fine for insider trading. The couple has ten days to lodge an appeal.

Prof. Zhang Huiming with Fudan University in Shanghai, said it was not easy for Huang, a high school dropout, to make the chain stores into a giant company and earn profit, that was why he sought government protection by bribing officials.

"Advantages gained through bribing government officials can not make the company truly competitive in the market," Zhang added.

A statement from Gome after the sentence's announcement said the company respected the judicial decisions and that the 5 million yuan fine would not substantially impact its business.

Known as the "Price Butcher" for its low prices, Gome has more than 560 stores in more than 160 Chinese cities, including in Hong Kong and Macao.

Huang Guangyu and his brother founded the firm as a small home appliance store in Beijing in 1987.

Huang resigned as Gome's chairman in January 2009.

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