Caixin
Dec 27, 2019 04:22 AM
FINANCE

Former Chairman of Hengfeng Bank Sentenced to Death for Corruption

Former chairman of Hengfeng Bank Jiang Xiyun plans to appeal death sentence.
Former chairman of Hengfeng Bank Jiang Xiyun plans to appeal death sentence.

Jiang Xiyun, the former chairman of China’s troubled Hengfeng Bank, was sentenced to death for receiving bribes and illegal accounting practices, with a two-year reprieve, a local court said Thursday. Three others were convicted and sentenced to prison in the Jiang corruption case.

Jiang’s lawyer told Caixin that the defense team believes the conviction was based on insufficient evidence and that the defendant was locked up for five years during the investigation, prosecution and trial, longer than the legal time limit. The former bank chief will appeal according to the law, the lawyer said.

Hengfeng Bank, which came into existence in 2003 and is one of 12 national joint-stock commercial banks, has been marred by scandals in recent years. Jiang’s successor has also been under investigation for alleged embezzlement. The bank is in the midst of a restructuring led by the government. Earlier this month, Hengfeng announced a private placement to raise 100 billion yuan from a group of state and foreign investors.

Between 2008 and 2013 when he was chairman of the Shandong-based bank, Jiang transferred about 754 million yuan ($108 million) of the bank’s stock to entities controlled by himself or his relatives, according to the verdict issued by the Yantai Intermediate People’s Court.

Jiang received 60.4 million yuan of bribes from companies and individuals in return for providing benefits for them to acquire the bank’s stock and obtain loans from the bank, according to the verdict.

The former chairman also directed his relative Sun Jinguang, another defendant in the case, to destroy accounting records related to 660 million yuan of illegal transactions, the court said. Sun was sentenced 33 months in prison and fined 20,000 yuan.

Jiang was ordered to return his embezzled Hengfeng stock and related interests to the bank and was fined 40,000 yuan for destroying accounting records. All of his personal property will be confiscated and turned over the government.

Zhao Chunying, former financial head of Hengfeng Bank, was sentenced to 12 years in prison and fined 1 million yuan. Zhao’s family told Caixin that he has returned most of his embezzled money and will appeal the verdict.

Zhang Wenkai, a former assistant to the bank’s president, was found to have illegally issued under Jiang’s orders 3.7 billion yuan of guarantees to Jiang’s affiliates without charging related fees. Zhang was sentenced to 34 months in prison.

Contact reporter Denise Jia (huijuanjia@caixin.com)

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