China Hits Fugitive Tycoon’s Company With $8.7 Billion Fine

A Chinese court levied a 60 billion yuan ($8.7 billion) fine against a company controlled by tycoon-in-exile Guo Wengui, escalating the financial squeeze facing the outspoken Communist Party critic.

The Dalian Intermediate People’s Court found Beijing Zenith Holdings Co. and two individuals guilty Friday of coercing investors into a series of transactions between 2008 and 2014 that allowed Guo to gain control of a local securities brokerage. One of those defendants and three others were also found to have misappropriated 2 billion yuan. While some of the illicit gains have been recovered, the court said it will seek to recover the rest.

Representatives for Beijing Zenith couldn’t immediately be reached. The five individuals, none of which included Guo, received suspended sentences. Four got fines ranging from 100,000 yuan to 300,000 yuan.

Guo, also known as Miles Kwok, has been known for lobbing allegations of political corruption involving high-level officials from the ruling Communist Party, including via YouTube and Twitter. Living in exile in the U.S. since 2015, Guo has seen his Chinese and Hong Kong assets frozen amid investigations into his finances.

The Dalian court found that Guo colluded with Ma Jian, a former vice minister of China’s top spy agency, in Zenith Holdings’ quest to take over Minzu Securities, a mid-sized brokerage house based in Beijing. Ma abused his power to threaten and eliminate Zenith Holdings rivals in multiple transactions, eventually enabling Guo to complete the takeover, the court said.

The deal netted Zenith Holdings some 11.9 billion yuan in illegal gains, according to the court. Ma was expelled from the Communist Party in 2016 is being investigated by anti-corruption authorities.

After gaining control, Guo and the other defendants siphoned off 2 billion yuan funds from Minzu Securities to Pangu Investment, another firm controlled by Guo, the court said.

Source: Bloomberg

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