04/08/2008, 00.00
CHINA
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The 16th richest man in China found guilty of corruption

Zhang Rongkun was involved in illegal loans from the social security funds of the Shanghai Municipal Bureau. His was a clear example of how one can go from nothing to building an empire through connections and endemic corruption.

Shanghai (AsiaNews/Agencies) – Businessman Zhang Rongkun, the 16th richest man in China in 2005, was sentenced to 19 years in prison for corruption for his involvement in Shanghai’s social security scandal, which also brought down the city’s Communist Party Secretary Chen Liangyu and more than 25 other government officials and company executives.

Mr Zhang was accused of bribing Zhu Junyi, former director of the Shanghai Municipal Bureau of Social Security, to get 3.2 billion yuan of illegal loans from social security funds as well as using funds for personal use.

In return he offered more than 29 million yuan in bribes to several government officials, including Wang Weigong, former secretary of late Deputy Premier Huang Ju and deputy general manager of the Shenergy Group, who received 9.3 million yuan in part for helping to arrange introductions to other officials.

Mr Zhang was also charged with stock market manipulation charge for his purchases of shares in toymaker Shanghai Haixin Group in order to drive up the price, then sold the shares to a fund manager he knew.

The court also decided to withhold more than 1.3 billion yuan (HK.4 billion) in assets seized from Zhang and fined two of his companies a combined 282 million yuan.

Zhang's rise from a small-time entrepreneur running a clothing business in Jiangsu province to rich potentate shows how a network of connections and corruption can build a business empire.

Corruption is a serious problem and remains Chinese leaders’ top priority. According to the Carnegie Endowment for International Peace, it costs the mainland US$ 86 billion a year and is one of the most serious threats to its economic and social stability, cause of social unrest in a population tired of corrupt officials.

For many analysts though the problem is structural, built into a system that gives a wide berth to local government without corresponding protection of citizens’ rights, including their civil rights.

Zhang announced he will appeal the sentence which was reached after a one-day trial in March.

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