A tycoon who became China’s richest man by building an electronics and home appliance empire was jailed yesterday for 14 years for bribery and insider trading, capping a spectacular fall from grace.
Observers said Huang Guangyu (黃光裕), a high school dropout once known as the “Price Butcher” for the low prices at his massive GOME chain of stores, had been held up as an example of unscrupulous corporate greed and corruption.
A Beijing court ordered Huang, in his 40s, to pay a fine of 600 million yuan (US$88 million), and authorities seized another 200 million yuan in assets as part of his conviction, state Xinhua news agency reported.
A court official said he could not immediately confirm the decision.
Huang was named China’s richest man in 2004, 2005 and 2008 by the Hurun Report magazine. In October 2008, his estimated net worth was US$6.3 billion.
A month later, he was detained and placed under investigation. He resigned as GOME director and chairman in January of last year. Huang was held for more than a year without charge, and was then tried last month in a Beijing court.
The court found him guilty of bribing or ordering others to bribe five government officials with 4.56 million yuan in cash and properties from 2006 to 2008, Xinhua said.
The bribes were offered in exchange for “improper benefits” for Huang’s GOME Electrical Appliances and his Beijing Pengrun Real Estate Development, it said previously.
Gome and Pengrun were fined 5 million yuan and 1.2 million yuan respectively for their involvement in the scandal.
Huang was also convicted of insider trading of shares in the Shenzhen-listed Beijing Centergate Technologies, in which he was the majority shareholder. He allegedly earned more than 300 million yuan in illegal profits.
He was further found to have engaged in “illegal business dealings.”
The court said it had shown “leniency” even though Huang’s crimes were “extremely serious” because he had admitted his guilt and cooperated with investigators, Xinhua said.
Before his arrest, Huang was revered in the media as a model entrepreneur, once dubbed the “Sam Walton of China” after the founder of Wal-Mart, who rose from nothing by shrewdly capitalizing on China’s decades of economic reforms.
After dropping out of school, he started building his fortune in his teens, running a roadside stall in Beijing where he sold radios and gadgets purchased from factories near his hometown in south China’s Guangdong Province.
GOME is now China’s largest electronics and appliance chain with more than 1,200 stores in more than 200 cities.
“It certainly can serve as a warning,” Shanghai-based financial analyst Yan Tan, who writes columns for several publications, said when asked about the verdict. “His case was closely watched by the public and it involves collusion with high-level officials.”
Wu Shaozhi, a Beijing-based lawyer specializing in cases involving financial crimes, said he suspected the court had handed down a “heavy” jail term because of Huang’s alleged connections in the upper echelons of power.
Two top police officials, including a former deputy minister of public security, have been detained on suspicion of bribery in connection with the case, reports have said.
Huang has also been linked to the sacked former mayor of Shenzhen, Xu Zongheng (許宗衡).
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