Staff from Guo Wengui companies indicted in public prosecutions

Chinese prosecutors have indicted some staff from two companies connected to Interpol “red notice” criminal suspect Guo Wengui, judicial sources said Saturday.

Prosecutors in Dalian, Northeast China’s Liaoning Province, on Friday brought charges against several executives and employees of Beijing Pangu Investment Co, Ltd, on suspicion of duty encroachment and misappropriation of funds. On the same day, prosecutors in Kaifeng, Central China’s Henan Province, also initiated a public prosecution against Guo’s Henan Yuda Real Estate Company and its employees, on charges of defrauding loans and bill acceptance.

Prosecutors in Dalian found that in 2008 to get Zhao Yun’an, then chairman of Tianjin Huatai Holding Group Ltd, out of jail, Zhao’s wife approached Guo through an intermediary to bail out Zhao. Zhao was granted bail, but promised to transfer Huatai’s assets to Guo, who was able to take control of the firm.

In July 2008, without calling a board meeting, Guo directed Qu Long, a defendant in the case and former executive of Huatai, to transfer more than 400 million yuan ($ 60 million) to companies controlled by Guo.

In the Henan case, prosecutors found that in 2008 Guo directed all former senior staff of Henan Yuda Real Estate Company to fraudulently obtain loans and bill acceptance totaling 1.5 billion yuan from seven banks by setting up shell companies and fabricating contracts and projects.

Part of the money was used to clear Yuda’s debts, which was controlled by Guo, while the rest was transferred to Beijing Pangu Investment Company or overseas. Some 213 million yuan has yet to be recovered.

On Friday, three former members of Beijing Pangu Investment Company were given prison terms by a local court in Dalian, Liaoning for fraudulently obtaining loans and foreign exchange.