Jailed airline tycoon points finger at official

PUBLISHED : Friday, 02 September, 2011, 12:00am
UPDATED : Friday, 02 September, 2011, 12:00am

A jailed former airline tycoon yesterday accused a top official in Wuhan, provincial capital of Hubei, of adultery, usury, abuse of power and embezzlement.

The relatives of 51-year-old Lan Shili, who founded the private East Star Airlines in 2005, released a document accusing Yuan Shanla, Wuhan's executive vice-mayor, of crimes including abuse of power, playing a major role in toppling the airline and cohorting with a triad head.

A spokesman for the Wuhan city government's news office said the accusations were 'groundless rumours of a malicious nature'. He said the government's internet censor had stepped in and further government response would depend on how public opinion unfolded online.

Lan was named China's 136th richest person by Forbes magazine in 2008. He was jailed by the Wuhan Intermediate People's Court for four years in April last year for tax evasion.

Lan's accusation, dated July 22 and read by his relatives at a Beijing press conference, was submitted to Hubei's prosecutors and anti-graft watchdog in July, but no response had been received, his relatives said. It said a detailed list of allegations against Yuan, 57, had also been passed on with evidence.

Yuan was accused of demanding 500,000 yuan (HK$610,722) from Lan to finance his son's trips to France and Hong Kong as well as mahjong games from 2007 to 2008.

He was also accused of keeping at least two mistresses - the manager of a bank and the head of a hotel. Both allegedly reaped enormous financial gain because Yuan deposited huge sums with the bank and referred government business to the hotel, as well as protecting the hotel's gambling, sauna and nightclub operations.

Yuan was also accused of lending 50 million yuan in government funds to triads for loan sharking and helping them collect debts. Yuan was further accused of forcing Lan to borrow 70 million yuan from loan sharks, and attempting to restructure East Star Airline and force its sale for an unreasonably low price. Lan resisted, his relatives said, resulting in Yuan taking revenge by fabricating a number of criminal allegations against Lan.

Yuan has held senior positions with the Wuhan city government since the late 1980s and took up his current position in 2007.

Previous mainland media reports say East Star Airline was ordered to cease operation in March 2009 due to 'financial difficulties and management problems', shortly after it rejected a government-initiated takeover. Since then, Lan has been waging an unsuccessful legal battle to revive his airline.

Lan's nephew, Lan Jianmin, assistant president of East Star Corporation, said lawyers and family members had been barred from visiting his uncle.

50m yuan

The amount in government funds that Lan Shili accused Yuan Shanla of lending to triads for loan sharking