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Guo Wengui

Trial reveals fugitive Chinese tycoon’s financial operation

Three executives say Guo Wengui ordered them to commit fraud to secure a 3.2 billion yuan loan

PUBLISHED : Friday, 09 June, 2017, 11:44pm
UPDATED : Saturday, 10 June, 2017, 2:00am

Fugitive tycoon Guo Wengui ­instructed his staff to produce fake business documents to apply for a 3.2 billion yuan (US$470 million) loan from the Agricultural Bank of China in 2010, three ­former executives told a court in ­Dalian on Friday.

Guo, who has close ties to disgraced former state security vice-minister Ma Jian, now lives in New York. He has drawn global attention in recent months with a stream of corruption allegations against senior Chinese figures in interviews with overseas media and on social media, but has provided little evidence to support his claims. He is wanted by Beijing for alleged corruption and is subject to an Interpol “red notice”.

In the Xigang District People’s Court, Yang Ying, chief financial officer of Beijing Pangu Investment Co, Lu Tao, its deputy general manager, and Xie Honglin, a financial manager, pleaded guilty to charges of obtaining loans using fraudulent documents. Lu and Xie also pleaded guilty to buying foreign currency using fraudulent means. All three will be sentenced at a later date.

Guo declined to comment on the trial when approached by the Post ahead of the hearing.

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Prosecutors accused Guo of instructing the three executives to produce fake contracts, company stamps and other materials to apply for the loan, the bulk of which would pay for interior finishing work at Pangu Plaza, a dragon-shaped building near the Olympic Park in Beijing.

Pangu then provided a fake invoice for 3.2 billion yuan from a company that was supposed to do the work, the indictment said. Prosecutors said Pangu paid off the loan and interest by the end of 2014, but the loan was not used for the purpose stated in the contract.

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Lu testified in court that Guo had instructed him to make fake company stamps. Yang said that Guo had given her the fake invoice, which Guo had purchased.

She said 1.6 billion yuan of the loan was used to buy a majority stake in brokerage Minzu Securities, while 600 million yuan was transferred to Hong Kong via an underground bank. Another 400 million yuan was used to repay a loan from an individual.

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A sum of 70 million yuan was deposited with the China Construction Bank, serving as the guarantee for a loan outside the mainland, which Guo used to buy a luxurious villa at South Bay, Hong Kong, the court heard. The charge of fraudulently acquiring foreign currency centred on Guo’s purchase of a private jet in Hong Kong, the indictment said.

“I deeply regret that I’ve breached the law as a result of blindly following Guo Wengui’s instruction,” Yang told the court.

Guo and his son were not indicted in the two cases but it was mentioned they are implicated in other cases. Guo told overseas media the three were his most trusted Pangu staff, but denied ordering them to falsify documents.