Caixin
Sep 24, 2020 05:21 AM
POLITICS & LAW

Former Top Shenzhen Official Accused of Abetting Infamous Businessman

Li Huanan
Li Huanan

Li Huanan, a former top official in charge of law enforcement in Shenzhen, was accused of being the “protector” of an infamous businessman involved in organized crimes such as illegal fundraising and usury, according to China’s top graft buster.

Li, who was sentenced to 15 years in jail by a court in Guangzhou in July 2020 for taking bribes, told Shenzhen police in 2016 to turn a blind eye to complaints of illegally accepting public deposits by a gang-style business run by local businessman Zhang Wei, according to a statement published Tuesday by the Central Commission for Discipline Inspection (CCDI).

Zhang, who was detained in 2018 and indicted a week ago, is the controlling shareholder of Shenzhen-listed financial company Suzhou China Create Special Material Co. Ltd. The company is a main financing vehicle of a conglomerate controlled by Zhang that manages 30 billion yuan of assets ($4.3 billion). Zhang controls 167 companies directly and indirectly, business records showed.

Zhang, 47, operated gang-like organizations using online fundraising platforms to illegally accept public deposits and issue high-interest loans. They engaged in fraud, used violent measures to collect debts and faked legal cases to force debtors and guarantors to cede real estate properties, according to the statement.

In April 2019, Shenzhen police cracked down on a 44-member gang led by Zhang and his wife Wang Tao. Zhang was indicted Sept. 16, 2020.

The CCDI statement for the first time revealed links between 60-year-old Li and Zhang. Li was placed under party investigation in October 2018, one month before Zhang was detained.

Caixin learned that Zhang and Li were long-time friends. It was an open secret in local financial circles that Li and Zhang were closely associated, sources said.

Li became deputy Communist Party chief and secretary of the Law and Politics Committee of the city’s party committee in 2015. He held key positions in the municipal law enforcement system starting in November 1993.

Fully aware of his gang-related background, Li introduced Zhang to court judges and police officers in return for bribes, taking advantage of his various positions in the court, municipal legislature and party committee, the statement said. Zhang’s connections through Li helped him fake lawsuits to frame clients. Li even secured a seat in the municipal legislature for Zhang, according to the statement.

The two persons had suspicious transactions worth of tens of millions of yuan, Caixin learned.

Contact editor Han Wei (weihan@caixin.com) and Bob Simison (bobsimison@caixin.com).

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