Posted on 10/13/2002 2:01:00 PM PDT by Conagher
HONG KONG, Oct. 10 — Zhu Xiaohua, the former president of China's sixth-largest bank and previously one of China's leading financial officials, was convicted today in Beijing on bribery charges and sentenced to 15 years in prison.
The verdict, reported by the official New China News Agency, was the latest sign of Beijing's increasingly tough stance in cases of possible corporate malfeasance. Mr. Zhu is the highest-ranking banker convicted so far in the Chinese government's move against executives at state-owned banks. Some have made huge loans to close friends — poor credit risks who are also sometimes the sources of lavish gifts.
The crackdown on bankers began three years ago, when Mr. Zhu was abruptly dismissed from his position as president of the Hong Kong-based China Everbright Bank. Prosecutors stepped up their activity last January, when the president of the China Construction Bank was reportedly put under house arrest after Chinese and American regulators found irregular business practices at operations of the Bank of China that he used to oversee.
In the last three months, Chinese officials have begun a parallel campaign to curb widespread tax evasion and shadowy business practices that have enriched entrepreneurs who run state-owned enterprises or do complex deals with them. Police officers have detained, but not charged, several prominent executives in recent weeks, most notably Yang Bin, a farm products magnate arrested last week as he was preparing to move to North Korea to run a free-market enclave planned there.
The campaigns come as China struggles to cope with a rapidly widening gulf between rich and poor, and as China's Communist Party prepares for its national party congress next month, the first in five years. Party cadres have been urged to show solidarity and integrity, a reflection of the leadership's worry that corruption may be undermining respect for the party.
In sentencing Mr. Zhu to prison today, the First Intermediate Court in Beijing also ordered the confiscation of all his personal assets, the New China News Agency said. But Mr. Zhu was spared execution, the fate of many lower-ranking officials convicted of corruption in China.
Before serving as president of the Hong Kong-based China Everbright Bank, Mr. Zhu had been a vice governor of China's central bank, the People's Bank of China. He had also directed the agency that manages China's enormous foreign exchange reserves.
His fall makes it more likely that his political patron, Prime Minister Zhu Rongji, will step down in the coming months, as expected, Chinese political analysts said today. A leading critic of China's bureaucracy, Zhu Rongji has been the architect of China's financial reforms since coming to power in 1993.
Some of the prime minister's closest allies have run into trouble with the law, although he has not been accused of misconduct.
On Jan. 11, Wang Xuebing was abruptly dismissed from his post as president of the China Construction Bank despite longstanding ties to the prime minister. Zhu Xiaohua's successor as director of China's foreign exchange reserves, Li Fuxiang — also said to be one of the prime minister's protégés — mysteriously fell to his death from the seventh floor of a hospital in 2000.
But Zhu Xiaohua was most closely linked to the prime minister, although the two are not believed to be related. The prime minister was nicknamed "boss Zhu," while Zhu Xiaohua was "little boss Zhu."
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