The former Customs director of Hubei's provincial capital, Wuhan, went on trial on Monday in a case allegedly involving state losses of more than 500 million yuan (HK$470 million). Mo Haitai faces charges of smuggling and dereliction of duty for allowing friends to import soybean products and lambs' wool into China duty-free and for turning a blind eye to smuggling, Hubei's Chutian City News reported. Mo has denied taking part in any criminal activity, confessing only to issuing 'principled instructions' to staff that implied the course of action they should take. An official with the Wuhan Intermediate People's Court said: 'Most of the evidence we have against Mo Haitai surrounds numerous concessions he made for his friend Huang Haiyong, a private businessman involved in the soybean industry.' 'We believe the two men had been collaborating since the mid-1990s when Mo was stationed in the Customs operations in Shenzhen. Huang Haiyong is wanted by police.' The most serious allegation against Mo is that in January 1997 he approved the establishment of a bonded warehouse for Huang, who was setting up a joint venture between a Hong Kong company and a Wuhan firm. Inspectors discovered the warehouse did not exist, and that the contract allowed 73.6 tonnes of soybean oil to be smuggled into the country, costing 4.92 million yuan in lost taxes. Mo has been accused of facilitating several other smaller smuggling operations prior to the 1997 case, as well as violating normal procedures regarding items forfeited and confiscated by Customs.