Firms fined, 15 people sentenced for fraud
Fifteen people were sentenced to jail and three companies were fined for fraud for illegally raising 43.4 billion yuan ($6.4 billion) by Shanghai No 1 People’s Intermediate Court on Wednesday.
Shanghai Kuailu Investment Group was fined 1.5 billion yuan and its two affiliated companies, East Hongqiao Microcredit and East Hongqiao Financing Guarantee, were fined 200 million yuan each.
The companies’ former executives, Huang Jialiu and Wei Yanping, were sentenced to life in prison. Another 13 people, including Xu Qi and Zhou Mengmeng, were sentenced to 9 to 15 years.
The verdict said that from 2013 to 2016, Kuailu chairman Shi Jianxiang organized illegal fundraising through the affiliated companies and other financing platforms.
Shi directed East Hongqiao Microcredit to forge fake credit materials and East Hongqiao Financing Guarantee to provide false guarantee materials, and then converted them into different wealth products that were sold along with unlicensed fund products by Zhonghai Investment to the public through conferences,
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internet advertising, phone calls and other channels. A total of 43.4 billion yuan was involved.
The money was transferred to bank accounts controlled by Shi and Kuailu. While 28.2 billion yuan was paid to investors for principal reduction and interest, the rest of the money was used for purposes such as share acquisition and investment in film projects. Some of the money was misappropriated, the court said, as it was transferred overseas, ending with a loss of 15.2 billion yuan and nearly 40,000 victims.
The court said the three companies, as well as 15 people who were directly involved in the fraud, caused huge economic losses and seriously damaged the nation’s financial order and safety. Municipal justice departments will continue recovering the money and hunting for fugitives, including Shi, who fled China to the United States in March 2016 and is currently on the wanted list issued by China’s anti-corruption authority.
Around 300 people, including defendants’ relatives, representatives of the victims and officials from the US consulate in Shanghai, were in the courtroom to listen to the case.
The price of soybeans did not see big fluctuations last year, despite the drastic fall of imports from the United States following a tariff increase, the Ministry of Agriculture and Rural Affairs said on Wednesday.
Prices of imported soybeans in China increased by 6 percent between January and November last year, from 3.34 yuan to 3.54 yuan ($0.49 to $0.52) per kilogram, before falling to 3.42 yuan per kilo in December, Tang Ke, chief of market and information at the ministry, said at a news conference.
Government departments and enterprises took various steps last year to reduce the impact of reduced imports from the US. Moves included increasing imports from other countries, such as Brazil, and promoting the use of soybean substitutes in the feed industry to reduce demand, he said.
China relies heavily on imported soybeans, most of which are used to produce animal feed or vegetable oil. More than 80 percent of soybeans consumed in China are imported.
Tang predicted that China will have an adequate soybean supply from imports, citing increased planting this year in China and other countries, such as Argentina, and adequate stocks in the US, a major soybean producer.
“It is predicted that the output of soybeans in Argentina will increase by 17 million metric tons this year over last year,” he said.
“Planting of soybeans is expected to continue to rise this year. We will closely follow soybean production and markets at home and abroad, and release information about its supply, demand and price in a timely manner.”
China imported 88 million metric tons of soybeans last year, a decrease of 7.9 percent from 2017, according to the General Administration of Customs.