A Shanghai court has accused the former chairman of state-owned Bright Food Group Co Ltd (光明食品) of embezzling about US$31 million and accepting bribes, Chinese state media reported.
The allegations against Wang Zongnan (王宗南) relate to his time at state-owned companies Shanghai Friendship Group (上海友誼集團) and Lianhua Supermarket Holdings Co Ltd (聯華超市).
Wang was general manager at Shanghai Friendship Group and then at Lianhua Supermarket, before becoming chairman at Bright Food in 2006 until his resignation for health reasons last year.
At a hearing in Shanghai, prosecutors accused Wang of embezzling 190 million yuan (US$31 million) between 2000 and 2006 while he was chairman of Lianhua Supermarket, Xinhua news agency said late on Friday.
The court also charged him with accepting 2.69 million yuan in bribes, the report added.
In 2003, Wang’s parents bought two Shanghai villas for 2.1 million yuan — 2.7 million yuan less than the then-market price — from a company subsidiary their son allegedly did an unspecified favor for in 2000, Xinhua said, without elaborating.
A verdict is expected later, it added.
While chairman of Bright Food, Wang helped put one of China’s biggest food corporations on the global stage with several acquisitions, including a deal for a majority stake in Britain’s Weetabix, which valued the cereal maker at US$1.94 billion.
Under Wang, Bright Food also bought into Australia’s Manassen Foods and New Zealand’s Synlait Milk Ltd.
Wang’s trial is the latest incident in a government anti-corruption campaign that has embroiled several senior state officials, including a former security chief, and that has recently extended to executives at major state companies.
Separately, a former vice president of China North East Petroleum Holdings Ltd (CNEP, 中國東北石油控股) was sentenced to three years’ probation for an accounting misstep after more serious charges were dropped or dismissed in a case spawned by US regulators’ investigation of reverse mergers involving Chinese companies.
Chao Jiang (姜超), 34, was also fined US$10,000 by US District Judge Richard Leon in Washington on Friday for failing to maintain accounting controls at CNEP.
The charges grew out of a 2012 US Securities and Exchange Commission civil fraud case against CNEP. The commission has been investigating reverse mergers since 2010 amid concerns that some Chinese companies that gained listings on US exchanges were doctoring their financial statements.
CNEP was a Nevada corporation formed to undertake exploration, drilling and production in China, with principal offices in New York and California, court filings said.
It was formed through a reverse merger with a US-based shell company in 2004, according to the filings. The New York Stock Exchange delisted the shares in 2012.
Jiang was originally charged with conspiracy, securities and wire fraud, and making false statements.
Leon threw out some of the counts and in April declared a mistrial after jurors failed to agree on the remaining charges.
Jiang pleaded guilty to the failing to maintain accounting controls charge in September. Prosecutors recommended probation.
Additional reporting by Bloomberg
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