Predecessor's crimes see firms fined $375m

PUBLISHED : Monday, 31 March, 2003, 12:00am
UPDATED : Monday, 31 March, 2003, 12:00am

A judge in the southeast city of Fuzhou imposed penalties of more than 400 million yuan (about HK$375.52 million) on the provincial units of China Telecom, China Unicom, China Post and other firms in a case involving the smuggling of US$60 million of mobile-phone equipment.

On Thursday, Judge Lin Hongying, of the Middle Court of Fuzhou, capital of Fujian province, announced the fines, in addition to prison terms for those involved, according to a report in the 21st Century Business Herald yesterday.

It was the biggest smuggling case in Fujian since the mid-1990s, when Yuan Hua Group smuggled in goods worth billions of yuan. Yuan Hua's former chairman Lai Changxing is in Vancouver fighting extradition to China.

The Fuzhou case dates back to 1997, when the Fujian Post and Telecommunications Management Bureau decided to expand its GSM network by importing Nokia equipment.

The court ruled that the firm entrusted to handle the business smuggled more than US$60 million worth of mobile telecommunications equipment, evading taxes totalling 335 million yuan between October 1997 and the start of 1998.

Judge Lin ruled that, as the bureau had since been broken up into separate companies, he would impose fines totalling 260 million yuan on those companies - the Fujian Postal Bureau, the Fujian branch of China Telecom, Fujian Mobile Telecom and the Fujian branch of China Unicom.

He also ordered fines of 67 million yuan each on the two companies that handled the imports - Ba Min Telecom and Ba Min Telecom Electrical Machinery & Equipment - and a fine of 109 million yuan on another firm involved, Xifang (Western).

He sentenced the former deputy director of the bureau, Zhang Maodong, to 14 years in prison and three senior managers of Xifang to terms of between eight and 13 years. All those convicted have appealed.

Investigators discovered the case in 1998 and started making arrests from October that year.