Beijing Zhengquan Company was fined 60 billion yuan under the name of Guo Wengui

On October 12, 2018, the official website of the Intermediate People's Court of Dalian City, Liaoning Province reported that the defendant unit Beijing Zhengquan Holdings Co., Ltd., the defendants Guo Hanqiao and Zhao Dajian forced transactions, and the defendants Zhao Dajian, Shan Weiliang, Yang Ying and Lu Tao embezzled fundsThe judgment of the first instance was made public.

From 2008 to 2014, Guo Wengui (Guo Wengui), the actual controller of the defendant unit Beijing Zhengquan Holdings Co., Ltd.At large) in order to enter the field of financial securities, decided to acquire the equity of China Minzu Securities Co., Ltd. (hereinafter referred to as Minzu Securities) in the name of Zhengquan Company and realize the holding.

In order to eliminate the obstacles that may be encountered in the acquisition process, Guo Wengui approached the then Deputy Minister of State Security Ma Jian (handled in another case) for help, and Ma Jian agreed.At the same time, Guo Wengui instructed the defendant Guo Hanqiao, who was the investment consultant of Zhengquan Company at the time, and the defendant Zhao Dajian, who was the chairman of Minzu Securities at the time, to be responsible for the acquisition.

The results show that in accordance with the relevant provisions of the Criminal Law of the People's Republic of China, the defendant, Beijing Zhengquan Holdings Co., Ltd., was sentenced to a fine of RMB 60 billion for the crime of forced trading.

The following is the full text:

On the morning of October 12, 2018, the Intermediate People's Court of Dalian City, Liaoning Province opened a court session. The defendants, Beijing Zhengquan Holdings Co., Ltd., Guo Hanqiao, and Zhao Dajian, who were publicly heard on August 20 this year, forced transactions, and the defendants Zhao Dajian and Shan WeiLiang, Yang Ying, and Lu Tao's misappropriation of funds cases were publicly pronounced in the first instance.The court ruled that the defendant unit and the five defendants were guilty of the crime, and sentenced them to corresponding penalties according to law.After the verdict was pronounced, each of the five defendants expressed their obedience to the court's judgment in court and did not appeal.

During the open trial of the first instance of Dalian Intermediate People's Court, under the auspices of the collegial panel, both the prosecution and the defense conducted cross-examination of evidence and court debate. The litigation representative of the defendant unit expressed ignorance of the crime charged by the procuratorate and raised no objection.;The defendants Guo Hanqiao, Zhao Dajian, Shan Weiliang, Yang Ying, Lu Tao and their defenders had no objection to the facts and charges of the crimes charged by the procuratorate, and at the same time pointed out that the defendant's behavior was instructed or instigated by Guo Wengui, and he was an accomplice, and he was present at the caseAfterwards, they all confessed their crimes truthfully and requested a lighter or mitigated punishment.

Each of the five defendants pleaded guilty in court, believed that their litigation rights were fully protected, and expressed their gratitude to the case-handling agency for handling the case in a lawful and civilized manner in their final statements.

The Dalian Intermediate People's Court found after trial that:

1. The fact of forced trading

In the process of acquiring the equity of Minzu Securities and increasing capital and shares, Guo Wengui conspired with Ma Jian, and Ma Jian intervened by sending a letter or dispatching personnel from the Ministry of State Security. Guo Wengui also instructed the defendants Guo Hanqiao and Zhao Dajian to directly report to the relevant units andIndividuals directly exerted pressure, threatened and squeezed out competitors, and finally enabled Zhengquan Company to achieve its goal of holding Minzu Securities.The specific facts are as follows:

In 2009, after Guo Wengui learned that Shijiazhuang City Commercial Bank Co., Ltd. (renamed Hebei Bank Co., Ltd. on December 4, 2009, hereinafter referred to as Shijiazhuang Bank) wanted to transfer its 6.81% stake in Minzu Securities, he ordered the defendant toGuo Hanqiao and Zhao Dajian are specifically responsible for the operation and acquisition of this part of the equity.

Because Minzu Securities shareholder Dongfang Group Co., Ltd. (hereinafter referred to as Dongfang Group) was unwilling to give up the acquisition, Guo Wengui approached Ma Jian. Ma Jian appointed Gao Hui and Man Yongping, then staff members of the Ministry of State Security, and Guo Wengui assigned Guo Hanqiao to Dongfang several times.The group threatened the person in charge of the group, forcing the Eastern Group to give up the right of first refusal.

Afterwards, Zhengquan Company acquired the above-mentioned equity at a price of RMB 290,825.1 million (the following currencies are not specified, all are RMB).

In 2010, in the process of transferring the 61.25% equity of Minzu Securities held by Capital Airport Group Corporation (hereinafter referred to as Capital Airport), Guo Wengui approached Ma Jian in order to ensure the acquisition of this part of the equity, and Ma Jian submitted to China in the name of the Ministry of State Security.The Civil Aviation Administration (hereinafter referred to as the Civil Aviation Administration) sent a letter requesting the Civil Aviation Administration to give priority to Zhengquan Company when transferring the equity of Minzu Securities held by Capital Airport. The two also assigned Gao Hui and Guo Hanqiao to talk to the person in charge of Capital Airport to threaten, forcing Capital Airport to set up transfer conditions favorable to Zhengquan Company.

At the same time, Guo Wengui and Ma Jian assigned Gao Hui, Guo Hanqiao, and Zhao Dajian to Dongfang Group to directly threaten the person in charge after learning that Dongfang Group intended to participate in the acquisition, forcing Dongfang Group to give up the right of first refusal again.After that, Zhengquan Company successfully acquired the above-mentioned equity at a price of 1.6 billion yuan, and its equity in Minzu Securities increased to 68.06%, becoming the controlling shareholder.

In 2013, Guo Wengui pushed Minzu Securities to hold a shareholder meeting and decided to increase capital and shares in two batches. After Zhengquan Company completed the first batch of capital increase of 4.2 billion yuan, in order to ensure the realization of Minzu Securities’ merger with Founder Securities Co., Ltd. (hereinafter referred to as Founder Securities)In the reorganization, Guo Wengui ordered Zhao Dajian to send a letter to companies such as Dongfang Group that participated in the second batch of capital increase in the name of Minzu Securities, requesting not to increase capital.

After being rejected by the Dongfang Group, Guo Wengui and Ma Jian respectively instructed Zhao Dajian and Gao Hui to go to the Dongfang Group to threaten the person in charge, forcing the Dongfang Group to give up the capital increase.In 2014, the equity of Minzu Securities held by Zhengquan Company increased to 84.4%.

In August 2014, Ethnic Securities and Founder Securities completed the merger and reorganization, and Founder Securities acquired 100% equity of Ethnic Securities.Through this reorganization, the 84.4% equity of Minzu Securities originally held by Zhengquan Company was replaced with 1,799,561,764 million shares of Founder Securities.It has been identified that as of August 10, 2015 when the incident occurred, the market value of the 1,799,561,764 million shares of Founder Securities acquired by Zhengquan Company through the above-mentioned forced trading behavior deducted investment expenses of 6,090,825,100,000 yuan, and an illegal profit of 11,904,792,542 million yuan.

On August 11, 2015, the above-mentioned 1,799,561,764 million shares of Founder Securities held by Zhengquan Company, the defendant unit, were frozen by Dalian Public Security Bureau according to law.

2. Facts of misappropriation of funds

After the merger of Ethnic Securities and Founder Securities and before the re-election of the board of directors, Guo Wengui still has a certain degree of control over the managers of Ethnic Securities.

In September 2014, Guo Wengui ordered the defendant Zhao Dajian, who was the chairman of Minzu Securities at the time, and the then deputy director of Minzu Securities, because of the shortage of funds in Beijing Pangu Investment Co., Ltd. (hereinafter referred to as Pangu Investment Co., Ltd.) and Zhengquan Company.The defendant Shan Weiliang, who was the president, and Yang Ying, the defendant who was the chief financial officer of Minzu Securities at the time, used the platform of Minzu Securities to raise funds for them.

Shan Weiliang devised the idea of transferring funds in the form of interbank deposits, and contacted the specific business operator Hengfeng Bank Co., Ltd. (hereinafter referred to as Hengfeng Bank). This idea was recognized by Guo Wengui.

Later, with Guo Wengui's consent, without the consent of the shareholder meeting and the board of directors of Minzu Securities, Zhao DajianliWith the convenience of his position as the chairman, he signed and confirmed the interbank deposit agreement, the general agreement on entrusted directional investment business cooperation, and payment instructions; Yang Ying took advantage of his position as the chief financial officer to be responsible for raising funds, internal approvals, and external transfers;

The defendant Lv Tao, who was the executive deputy general manager of Pangu Corporation at the time, was instructed by Guo Wengui to find qualified and controllable companies as loan subjects. Several people cooperated with each other under the cover of signing an interbank deposit agreement between Minzu Securities and Hengfeng Bank.Privately signed an entrusted directional investment agreement with Hengfeng Bank. From September to December of the same year, a total of 2.05 billion yuan of national securities’ own funds were transferred to Sichuan Trust Co., Ltd. (hereinafter referred to as Sichuan Trust) in seven batches.

Afterwards, through Fujian Guangming Stone Co., Ltd. (hereinafter referred to as Guangming Stone), Zhengzhou Jinhui Business Information Consulting Co., Ltd., Zhengzhou Lanhuai Business Consulting Co., Ltd., Zhengzhou Henghai Business Consulting Co., Ltd. signed a single trust loan contract with Sichuan TrustBy way of transfer of the aforementioned 2.05 billion yuan from Sichuan Trust.

Guo Wengui arranged to transfer 1.95 billion yuan of it to Pangu Corporation and its actual controlled Zhengzhou Yuda International Trade Co., Ltd., Zhengzhou Yuda International Trade Hotel Co., Ltd., etc., for repayment, loan repayment and other business activities; another 100 million yuanYuan Jing Guo Wengui agreed to transfer it to Guangming Stone Industry.

After appraisal, as of February 15, 2017, Minzu Securities had received a total of 41103718124 million yuan in repayments.After verification, the total amount of unrecovered funds is 1,638,962,818,760 million yuan.

The Dalian Intermediate People's Court held that the defendant, Beijing Zhengquan Holdings Co., Ltd., used threats to force others to transfer company shares, waive preemptive rights, and withdraw from specific business activities. The circumstances were particularly serious and constituted the crime of forced transactions.Defendant Guo Hanqiao, as an investment consultant of Zhengquan Company, was instructed by Guo Wengui, the actual controller of Zhengquan Company, to carry out forced transactions.Their actions constituted the crime of forced trading.

Defendants Zhao Dajian, Shan Weiliang, and Yang Ying took advantage of their positions as senior executives of Minzu Securities, and together with defendant Lu Tao, misappropriated funds from Minzu Securities under the direction of Guo Wengui, and transferred them to other companies actually controlled by Guo Wengui for operations and other activities. The amount was huge.His actions constituted the crime of misappropriation of funds.

Among them, the defendant Zhao Dajian committed several crimes and should be punished concurrently; the defendant Yang Ying discovered during the probation period that there were other crimes that had not been sentenced before the verdict was announced, so the probation should be revoked and the two crimes should be punished concurrently.The public prosecution agency accused the defendant unit Beijing Zhengquan Holdings Co., Ltd., the defendants Guo Hanqiao, and Zhao Dajian for the crime of forced trading, and the defendants Zhao Dajian, Shan Weiliang, Yang Ying, and Lu Tao for the crime of embezzlement of funds. The facts are clear, the evidence is solid and sufficient, and the charges againstestablished.

Guo Wengui, the actual controller of the defendant unit Beijing Zhengquan Holdings Co., Ltd., intervened through Ma Jian and the national security department by dispatching personnel or sending letters, or appointing company personnel to directly exert pressure, etc., in the company's acquisition of equity, capital increase and share expansion and other transactions and transactions.In the business link, he has repeatedly exerted pressure and threats on relevant units and individuals, excluded competitors, damaged the legitimate business rights and interests of others, obtained huge illegal profits, and seriously disrupted the normal market economic order. The circumstances are particularly serious, the harm is particularly serious, and the impact is particularly bad, the defendant unit should be severely punished according to law.

The illegal income obtained by forced transactions should be recovered and turned over to the state treasury.Defendants Guo Hanqiao, Zhao Dajian, Shan Weiliang, Yang Ying, and Lu Tao were all instigated by Guo Wengui to commit crimes of forced transactions or misappropriation of funds. They played a secondary and auxiliary role in the joint crime and were all accomplices;Truthfully confessing the facts of the crime, pleading guilty and repenting, has the statutory circumstances of lenient and mitigated punishment, and shall be given a mitigated punishment in accordance with the law, and probation may be applied.

To sum up, according to the facts of the defendant’s crime, the nature and circumstances of the crime, and the degree of harm to society, and in accordance with the relevant provisions of the Criminal Law of the People’s Republic of China, the defendant, Beijing Zhengquan Holdings Co., Ltd., was sentenced to a fine for the crime of forced trading.RMB 60 billion; the defendant Guo Hanqiao was sentenced to two years and six months in prison for the crime of forced trading, suspended for three years, and fined RMB 300,000;

The defendant, Zhao Dajian, was sentenced to two years in prison for the crime of forced trading and a fine of RMB 250,000. He was sentenced to two years and six months in prison for the crime of embezzling funds.RMB 250,000 in gold; the defendant Shan Weiliang was sentenced to two years and three months in prison for the crime of embezzling funds, suspended for three years;

The defendant Yang Ying was sentenced to two years in prison for the crime of misappropriating funds, and the criminal judgment (2017) Liao 0203 Xingchu No. 148 of the People's Court of Xigang District, Dalian City, Liaoning Province was revoked., and a fine of RMB 100,000 for the probation part, it was decided to implement a fixed-term imprisonment of three years, suspended for four years, and a fine of RMB 100,000 (already paid); the defendant Lu Tao was sentenced to one year in prison for the crime of misappropriating funds,Probation for two years.

The value of the 1,799,561,764 shares of Founder Securities held by Beijing Zhengquan Holdings Co., Ltd., the defendant unit frozen in the case, deducted RMB 6,000,000,000.90 of its investment expenses.Illegal gains after RMB 10,825,100 shall be recovered and turned over to the state treasury; funds misappropriated but not returned shall be RMB 1,638,962,818 and seven centsSix points will continue to be recovered and returned to the victim unit China National Securities Co., Ltd.