A CHINESE court jails the founder of home appliance giant GOME - once the country's richest man - for 14 years for bribery, insider trading and illegal business dealings, state media says.
Huang Guangyu - a high school dropout who built what is now the country's largest electronics and appliance chain - was also ordered to pay a fine of 600 million yuan ($101 million), Xinhua news agency reported.
Authorities seized another 200 million yuan in assets from Huang, once known as the "Price Butcher" for GOME's low prices.
Huang, in his 40s, was named China's richest man in October 2008 with an estimated net worth of $US6.3 billion ($5.5 billion) by the Hurun Report magazine.
He was detained and placed under investigation a month later, and resigned as GOME director and chairman in January 2009. He was held for more than a year without charge, and tried in April in a Beijing court.
He stood accused of bribing five government officials with 4.56 million yuan in cash and properties from 2006 to 2008, Xinhua reported previously.
The bribes were offered in exchange for "improper benefits" for Huang's GOME Electrical Appliances Holdings and Beijing Pengrun Real Estate Development Company, a private equity group which Huang headed, the reports said.
China's Securities Regulatory Commission previously said he was suspected of manipulating trading in two mainland-listed companies.
Before his arrest, Huang was revered in the media as a model entrepreneur who rose from nothing by successfully capitalising 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 Group is now China's largest electronics and appliance chain with more than 1200 stores in more than 200 cities.
He previously topped the Hurun Report's rankings of China's richest in 2004 and 2005.
Trading in Hong Kong-listed GOME was suspended in November 2008 after Huang was placed under investigation.
But it resumed in June last year after private equity firm Bain Capital invested at least 417 million US dollars in the form of convertible bonds and shareholdings in GOME in a bid to rescue its business and tarnished reputation.
A string of top business and government leaders have reportedly been implicated in Huang's case, including the sacked former mayor of the southern city of Shenzhen, Xu Zongheng.
Two top police officials, including a former deputy minister of public security, were also detained on suspicion of bribery in connection with the case, reports have said.
One of GOME's wholly owned subsidiaries, GOME Appliance, was charged earlier this year with bribery in connection with the charges against Huang.
GOME said it was "highly concerned" about the case and pledged to "actively defend against the accusation at the subsidiary".
But it said the damage to its operations would be limited, with the worst-case scenario being a fine.

[ Last edited by  atomic3d at 18-5-2010 14:10 ]

Was very sad to hear about Huang. He and his wife are nice people. A typical rags to riches story. Think the prison term is too harsh and he was put away that long because he was just too powerful, had too many high ranking Government officials under his control. What an amazing empire he built in such a short time though.

[ Last edited by  geoduck at 18-5-2010 14:35 ]

I don't feel sorry for a rich man that did some corrupt stuff. You do the crime, you do the time!

Isn't corruption just part of life in China? My friend's father said he couldn't get any kind of permits or government sign-off for his business without bribing officials left and right.

Part of the problem is that corruption and bribery are often not clearly defined until the police show up on your doorstep.

There's been a number of bribery cases the past few years involving less amounts that resulted in death sentences.

He's lucky he wasn't given the death sentence. Probably had to bribe to stay alive.

You are right, he most have not greased someone enough.......

From what i know it pretty much know. A few people that i know of that goto china often for business must bribe all the officials. Otherwise those certain officials will actually get offended and will make life tough for you even though you did nothing wrong and will make sure you cant run your business at all.

thats Chinese government for you.
how can one success with the way their government is run.
would surprise me if the government will swallow all his wealth either

Well, HK government and police were full of corruption decades ago when HK was in the similar development stage. But after the establishment of ICAC and high salary for public officials, HK gradually becomes corruption free.

China can follow this foot step too. However, this must come from the very top.

Held in prison for a year without being charged?  what kind of system is that?

Think the Chinese Govt does work. As for Huang, they have confiscated the part of his wealth which the Govt deemed was obtained through insider trading. Gome is now under new management to abate fears of its shareholders.

Call me crazy..but here is what I think:

People like this don't deserve what happens to them because they did something 'wrong' as in against the law...however I do not view what he did as wrong...We live in a dog eat dog world...Survival of the fittest...Our world works not only because it rewards the winners, but it crushes the losers...those who cannot survive don't deserve too...those who find a way to keep fighting are the survivors and winners...

I don't believe someone who is able to survive in our world deserves jail...but hey..that's just me...because I learned and accepted at a very young age that life is simply not fair...we don't make the rules..we just play the game...and any edge we can get...we take it...I don't believe in equality...

Fully agree. If Huang and his wife were in HK or in the US, they would' not have been jailed. This is a great injustice. Have been following their case closely as I've had dealings with them in the past and know they're decent people. In the US, you can get away with an economic crime  as long as you're rich and powerful. Like board members of Goldman Sachs and the CDO debacle. What these people did on Wall Street was not only illegal but outright unethical yet they not only went scott free they were even rewarded with huge bonuses from the the US stimulus package.

[ Last edited by  geoduck at 19-5-2010 09:02 ]

He should have been smarter and have his company be based in the USA or in the UK.  Then, he would be protected from Chinese prosecution.  He should be smart enough to know that the Chinese government can go after you regardless of how wealthy and powerful you are.

Actually, his company, Gome is based in HK and listed on the HK Stock Exchange. Surely he must have a foreign passport but cannot stay offshore all the time and exert control on the dealings in China simultaneously. Point is, if he knew he was doing something illegal, he would have stayed away. In Huang's case, he just had too much control and influence over senior officials which the Central Govt thought was undermining their authority, thus they went and arrested everyone. In the US, Goldman Sachs have control over the entire economic system and even have operatives/lobbyist in senior Government positions. That's why they never get caught and manage to blackmail the US Govt into dishing out more money to them in the bail out package and then blatantly distributed a big chunk of this as bonuses. You tell me who's corrupt?

[ Last edited by  geoduck at 19-5-2010 10:30 ]

I'm afraid this doesn't help. Stern Hu was an Australian citizen and high ranking executive of a large publicly listed Australian mining company. Didn't stop the Chinese from sentencing him to a lengthy prison term in a closed court for doing what had been considered normal business practices up to that point. The government simply weren't happy with his company and decided to make an example of him.

Actually, if the Chinese Govt want to nab you for suspected economic crime they can't if you stay away from China. They cannot extradite you on only suspicion or for questioning. In all the cases that I've come across (and it's quite a few), the suspect would stay away for several years to see if the coast is clear until they get a call from some of their former associates in China saying they must return to help close a new deal. The suspect would then return thinking it would be OK as several years have elapsed and there's been no action taken so far.  When the suspect returns he gets nabbed at the airport. Then it's house arrest for an indefinite period until the investigators can get a confession or names of other culprits. At the end, they may let you go or in most cases it's sentencing time.

Well, let me explain a bit more about staying in a foreign country.  First, you definitely have to be a citizen of that country and revoke your Chinese citizenship.  Second, you must stay in a country that will not extradite you.  UK is one very good example.  Switzerland is another.  There are a lot of Russian billionaires who funnel money to fund opponents of Putin which Putin demands to be extradited back to Russia for trial.  The UK refuses.  If the person is sent back to Russia for a trial, everyone knows that the only verdict is a guilty one since Putin exerts so much influence on the courts.  So if you play your cards right, you can run a successful business, in other words, a corrupted business and yet still stay untouchable.  And I agree, in China, everyone bribes.  It just depends if the government is interested in prosecuting you.

I agree. Most crooks know that jail-time is a risk of their chosen profession and accept it. The crooks I despise
the most are those who think they're above the law. They think they're so fuckin rich and so fuckin smart that
no one can touch them. Often it's true but it's nice when, occasionally, one gets his comeuppance.