Tuesday, April 12, 1994 - Page updated at 12:00 AM

E-mail article     Print

Chinese Execution Sends Anti-Corruption Message -- Executive Put To Death For $114 Million Bond Scam

Chicago Tribune

BEIJING - A company president involved in a $114 million public-bond scam was executed yesterday, and a former vice minister was ordered imprisoned for 20 years after a Supreme Court judge warned that their fate should be a lesson for corrupt senior officials in China's Communist Party.

It was the first time China's judiciary had singled out a member of the party's inner circle for graft. Corrupt officials usually are demoted, transferred or drummed out of the party.

In what appeared to be a showcase trial, the Supreme People's Court last Friday confirmed the death sentence imposed on Shen Taifu, 39, president of the Great Wall (Changcheng) Electronics conglomerate.

He had lured nearly 100,000 investors to risk their savings after Great Wall offered 24 percent payback rates.

Shen's government contact, Li Xiaoshi, then vice minister of the State Commission of Science and Technology, was sentenced to 20 years for receiving kickbacks in exchange for promoting the illicit money-raising scheme.

Four journalists allegedly bribed to publicize the scheme are to be tried with three bank clerks, another government official and three retired accountants. Li and the reporters received $29,500 in bribes, the court was told.

China's national TV network devoted most of yesterday's news to reports of the trial, apparently to placate outrage that the government's much-publicized crackdown on official corruption punished only lower-level offenders.

Backed by Li's power, Shen last year sued the Central Bank of China, which had ordered his company to stop issuing shares of stock. His lawsuit was dismissed and he was arrested.

The official New China news agency said Liu Jiachen, vice president of the Supreme Peoples Court, "advised state functionaries, especially those with power, to learn proper lessons from the cases of Shen and Li."

In recent months the abuse of official power has resulted in riots and demonstrations and reinforced party hard-liners who argue that China's economic reforms have led to a collapse of socialist morals while official graft has enraged the masses and endangered social stability.

State TV reported yesterday that the vice minister had accepted $4,600 in bribes from Shen before Great Wall issued its high-interest bonds last year. "Li . . . instructed his staffers to support the bond issue," the news report said.

Shen also was convicted of embezzling $345,000 from his company, mainly money that had been earmarked to buy technical patents. His wife, Sun Jihong, head of the company's accounting department, was jailed for 15 years for her part in the fraud.

The government has said most of the investors recovered their money.

In a return to the practice of Maoist days, Premier Li Peng, usually the harbinger of party campaigns, last month urged people to denounce unscrupulous officials and entrepreneurs.

Fury against official corruption and the accumulated wealth of provincial officials and the families of Communist Party higher-ups contributed to the student-led mass demonstrations in Beijing's Tiananmen Square in 1989.

Copyright (c) 1994 Seattle Times Company, All Rights Reserved.


Get home delivery today!