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CHINA> Regional
Probe into $2.2-billion fundraising scandal
(China Daily)
Updated: 2009-02-13 07:39

Authorities in Hunan province are investigating a 15-billion yuan ($2.2 billion) illegal fundraising scheme, Ta Kung Pao reported.

The Hong Kong newspaper quoted an anonymous asset liquidation officer as saying the amount of money involved in the scheme, identified in October in the Xiangxi Tu and Miao autonomous prefectures, was "huge and astonishing".

"A portion of the money had been spent on project construction, some squandered, and some was transferred abroad, which added difficulty to the liquidation process and efforts to try to return the money to the lenders," he said.

A conference on anti-corruption held last Thursday said 36 government officials, four of them municipal-level, were involved in the case.

A further 228 company officials from 20 companies are also under investigation, and 34 officials have been arrested.

Huang Xiulan, the former vice-head of the Xiangxi prefecture, was found to have earned more than 4.8 million yuan by taking part in fundraising as a consultant to three local firms.

She was also found to have helped destroy and hide evidence from investigators.

Che Lihua, spokesman for the Hunan provincial public security department, said investigators have made every effort to trace the funds.

To date they have confiscated more than 1,500 commercial properties, 450 shops, more than 20 private residences, 80 plots of land with land-use rights, 20 mining companies and other assets.

They have also taken possession of 118 vehicles and 50 million yuan in cash. All the bank accounts, with deposits of 62 million yuan, of the firms involved have been frozen.

Earlier reports said illegal fundraising had been going on in Xiangxi for 10 years.

Qiu Baochang, dean of the Beijing-based Huijia Law Firm, said: "Authorities should closely look into all cases involving illegal fundraising and severely punish the criminals."

 

 

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