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Verdict awaited in trial of Shanghai tycoon
2004-05-20
SHANGHAI - A Shanghai court has wound up the trial of a once high-flying tycoon accused of obtaining questionable loans, his lawyer said on Thursday of a case that has trained the spotlight on official corruption.But a verdict had yet to be announced in the trial of Zhou Zhengyi, a flamboyant property mogul once ranked China's 11th richest man, amid a scandal that threatened to implicate senior government officials and sparked public protests. "Yes, that's true," lawyer Tou Wuping told Reuters when asked if the trial had ended on Wednesday. "There's no outcome yet. This case has a very special background. I can't talk any more about it." Zhou was detained in May 2003 after state media reported that an investigation had been launched into two billion yuan ($241.6 million) in loans obtained from the state-run Bank of China, the nation's premier foreign exchange bank. But his trial has been shrouded in secrecy. A trickle of reports in official media included a brief announcement in a state newspaper on Thursday that the trial had opened. A court official said the trial had in fact ended, but would give no further details. It is unclear when the trial began. One observer said the government may seek the death penalty, if Zhou is found guilty. "He was highly connected and mixed with all the princes in China," said one risk consultant familiar with the situation, who spoke on condition of anonymity. "They're not going to give him a chance to talk." Shanghai's media has maintained a stony silence on the case, which experts say has tarnished the city's reputation as a haven for foreign investment while drawing unwanted attention to a financial system dogged by poor risk controls. "The Shanghai No. 1 intermediate court has recently begun trying the Zhou Zhengyi case," the official, Beijing-based China Securities Journal said in a brief report on Thursday. "It is understood that the investigating authorities are still accusing Zhou Zhengyi of falsifying paid-up capital and manipulating share prices," it said without elaborating. CELEBRITY DEFENDANT Much of the case against Zhou, a former snack-shop owner, centres on loans extended to Nongkai Development (Group) Co, a property firm he controlled. Official corruption -- understood by analysts to be endemic in various echelons of government -- has been portrayed by some as the greatest threat to the Communist Party's hold on power. Zhou's own scandal broke shortly after Hu Jintao took over as China's president from Jiang Zemin, and was seen by some observers at the time as part of a campaign against the so-called "Shanghai Gang" of politicians connected with Jiang. The property tycoon is also embroiled in a dispute with thousands of evicted Shanghai residents who accuse him of colluding with city officials to obtain a 43,000-square-metre parcel of prime land for free. Some of those residents had taken to the streets to demand compensation, while a Chinese lawyer who had been assisting them was sentenced to three years in jail in October. Zhou, once a fixture among Hong Kong's celebrity set, is just one of several moguls to have fallen under scrutiny in a spate of scandals that have implicated high-flyers who rapidly amassed fortunes in the 1990s. There have been repeated crackdowns on unauthorised deals between banks and a new class of nouveau-riche Chinese. Sino-Dutch flower magnate Yang Bin, once ranked China's second-richest man with an estimated fortune of $900 million, was jailed for 18 years for commercial crimes. Auto executive Yang Rong, facing similar charges, has fled the country. Reuters
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