Former Guangdong Kelon Electrical Holdings chairman Gu Chujun allegedly embezzled 3.48 billion yuan from the appliance maker with the help of associates and his companies, according to a China Securities Regulatory Commission (CSRC) report cited by mainland media. An investigation into Kelon's financial troubles by the CSRC found that Gu, who was arrested on September 2, his companies and several other persons stole 3.48 billion yuan through 'eight categories of crimes'. A Kelon spokesman yesterday declined to comment on the investigation, which began this year. Legal experts say Gu would be jailed if convicted. The alleged 'eight crimes' included Gu's transferring 187 million yuan from Kelon to one of his companies in May 2002 and transferring 355 million yuan from Kelon to a secret account in the Shenzhen branch of Guangdong Development Bank in March 2003. Gu was found not to have paid for 154 hectares in Jiangxi province which one of his firms bought from the local government for 91 million yuan in May 2002. Another of his alleged crimes involved embezzling 80.33 million yuan under the guise of advertising expenses. CSRC also uncovered fraud and inflated profits in Kelon's accounts during Gu's chairmanship from 2002 to last year, according to mainland media reports. Gu was dismissed as Kelon chairman in August last year. 'The 3.48 billion yuan figure is a huge sum. This is shocking,' said Yan Yiming, a Shanghai-based lawyer. 'Earlier, I heard rumours that Gu embezzled only 300 million to 700 million yuan.' The next step in the investigation would involve a court trial, said Mr Yan, who added: 'Gu will definitely be sentenced to prison.' Mr Yan said the jail sentence would be lighter than the punishment for government officials since Gu was a private businessman. If a government official stole the same amount from state coffers, he was likely to get a death sentence, said Andrew Lam Ping-cheung, a Hong Kong lawyer. 'Gu won't get the death penalty but it's almost certain he'll go to jail,' Mr Lam said. Mr Lam and Mr Yan are former activists on behalf of Kelon shareholders. Hisense Group, which signed a contract to acquire Gu's 26.43 per cent stake in Kelon, was likely to take legal action to recover the embezzled money from Gu and his companies, Mr Lam said. Raymond So Wai-man, an associate professor at the Chinese University of Hong Kong, said Kelon would have to write off the embezzled money as costs.