Listed Firm Officials Prosecuted for False Accounting

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Last updated at: (Beijing Time) Tuesday, August 06, 2002

Listed Firm Officials Prosecuted for False Accounting

Chinese prosecutors have laid formal charges against the board chairman and two other officials of the notorious listed company Zhengzhou Baiwen Co., Ltd. for falsle accounting.

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Chinese prosecutors have laid formal charges against the board chairman and two other officials of the notorious listed company Zhengzhou Baiwen Co., Ltd. for falsle accounting.

Li Fuqian, the board chairman, Lu Yide, the general manager, and Du Qunfu, head of the financial department, were formally prosecuted last week in Zhengzhou, capital of Henan Province in central China, media reports said Tuesday.

The prosecution is a major step forward in the investigation into the case launched by Zhengzhou police in September 2001, the reports said.

If found guilty, the defendants, under Chinese law, could be sentenced to up to three years in jail in addition to a fine of up to 200,000 yuan (about 24,000 US dollars).

According to the prosecutors, the company scored serious losses in 1997, but Li ordered a profit be entered on the financial report so that the company would be qualified to issue new shares in 1998.

The company's electrical appliance branch recorded a loss of 154.299 million yuan in the original report, but that was turned into a profit of 93.69 million yuan in the revised version, the prosecutors' investigation shows.

Lu Yide and Du Qunfu were arrested in December 2001, while Li Fuqian was arrested in March this year after being deprived his position as a national legislator.

The Shanghai Stock Exchange, where Zhengzhou Baiwen is listed, suspended the company's stock trading in May last year and gave it a year of grace to make profit.

The China Securities Regulatory Commission last September imposed a fine of two million yuan on the company, and a fine of 300,000 yuan on Li Fuqian and 200,000 yuan on Lu Yide.

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