China senior executives tied to Communist Party critic convicted

BEIJING: A senior executive of an investment firm linked to fugitive Chinese billionaire Guo Wengui was jailed yesterday for more than two years for fraud.

Lu Tao, who worked for Beijing Pangu Investment, was convicted on charges of obtaining loans and foreign exchange ‘by fraud’, a court in northeastern China said.

Chinese authorities often use criminal proceedings to punish critics and those perceived as threatening their grip on power.

Lu and his colleagues, Xie Honglin and Yang Ying, confessed to fraud involving 3.2 billion yuan ( US$ 470 million) in loans from the Agricultural Bank of China.

Lu was jailed for two years and three months, and the company was fined 245 million yuan, Dalian Xigang People’s Court said on its social media account.

Xie and Yang were sentenced to two years in prison with a threeyear ‘reprieve’, it said, suggesting they will avoid jail time. The three defendants had told the court that Guo, an outspoken critic of China’s ruling Communist Party, was Pangu’s ‘actual controlling shareholder’.

Guo directed them “to apply for loans from the bank with fake contracts, stamps and financial statements, which disturbed financial management order and threatened financial security”, the court said

Lu and Xie also fraudulently obtained US$ 13.5 million in foreign exchange ‘with falsified documents’. Lu told the court he had ‘ privately engraved an official seal’ for use on their loan applications.

“I knew (this was illegal). It was Guo Wengui who instructed me to do it, under the circumstances at the time I had no choice,” Lu said, according to video published previously on the court’s social media account. — AFP