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Chairman stands trial over fund scandal

By Cao Li (China Daily)
Updated: 2007-12-29 07:34

SHANGHAI: The trial of Zhang Rongkun, a key figure in the Shanghai social security fund scandal, began on Thursday in Jilin Province.

Zhang, 38, chairman of Fuxi Investment Corp, is charged with paying bribes totaling 30 million yuan ($4.1 million) to government officials and company heads, mainly to obtain monies from the city's pension fund in the name of highway investment, the website of Caijing magazine reported on Friday.

Wu Jiongming, one of Zhang's attorneys, declined to reveal any information related to the case.

Zhang and his company are alleged to have bribed Zhu Junyi, the former director of Shanghai labor and social security bureau and the fund's operator, and his family with money, gold, a diamond necklace and a camera worth a total of 1.31 million yuan.

The company received a total of 2.65 billion yuan in loans from the fund.

In September, Zhu was sentenced to 18 years in prison for his part in the scandal.

Zhang is also accused of bribing Qin Yu, the long-term secretary to sacked Shanghai Party chief, Chen Liangyu.

Zhang paid Qin about 400,000 yuan in order to gain approval for highway projects.

Qin was sentenced to life imprisonment earlier this month.

Zhang and his company are also alleged to have paid bribes of 9.33 million yuan to Wang Weigong, deputy general manager of the State-owned power firm Shenergy Company.

Wang allegedly lobbied Chen Liangyu to obtain the operational rights for the Shanghai-Hangzhou Highway and receive funding on highway investments.

Wang has not yet been sentenced.

Between 2000 and July 2006, when the scandal was uncovered, Zhang and his company paid bribes totaling 1.7 million yuan to the chairman and company secretary of Haixin Group, for the purpose of manipulating the stock market.

In addition to bribery, Zhang was charged with manipulating the stock market, conducting fraud in issuing bonds and faking registered capital.

Zhou Weiming, Zhang Jun and Wang Yongde, senior managers of Fuxi and Feidian, the main shareholder of Fuxi, are being tried along with Zhang.

The proceedings are expected to last up to five days.



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