Huang Yantian, former president of the bankrupt Guangdong International Trust and Investment Corporation (GITIC), was sentenced on Monday to 14 years in jail in a trial held before the Guangzhou Intermediate People's Court.

Huang, 64, was convicted of fraud in obtaining deposits worth more than 1.2 billion yuan (US$145.1 million) by promising high interest rates when he was in control of the company.

And without any discussion with and approval from the GITIC board, Huang illegally invested large sums in property markets in Hong Kong and many entertainment and real estate projects in the Chinese mainland.

Economic losses

Huang's "dictatorship" and wanton neglect of his duties caused State economic losses of more than 900 million yuan (US$108.82 million), according to a Guangzhou Intermediate People's Court spokesman Tuesday.

When GITIC went bankrupt, Huang failed to repay depositors 353.76 million yuan (US$42.78 million), plus 38.38 million Hong Kong dollars (US$4.93 million) and US$1.93 million.

Huang was also fined a total of 100,000 yuan (US$12,000) by the court, the unnamed official told China Daily.

And Huang did not appeal the verdict to a higher court.

Huang's malfeasance, poor decision-making and neglect of duties were the major causes of the failure of his company, the official added.

The closure led to GITIC Plaza changing hands. It was a prominent skyscraper and a symbolic building in the Guangdong provincial capital.

Covering a floor space of more than 143,800 square meters, the 63-storey building included a five-star hotel, an office sub-wing and a luxury apartment building. It was auctioned off at 1.13 billion yuan (US$136.14 million) in Guangzhou in October of 2002. It was regarded then as the largest auction in China.

Huang was president of GITIC between December of 1992 and May of 1997. And he once appeared on the front cover of Business Weekly, one of the world's famous business magazines.

The GITIC case once raised great concerns at home and abroad.

GITIC was officially declared bankrupt in January 1999.

Bankruptcy case

It became the first non-banking financial company bankruptcy case on the mainland. It was also the largest such case in Guangdong Province.

A total of 494 offshore and domestic companies registered to be GITIC's creditors. And GITIC's debts reached 46.7 billion yuan (US$5.63 billion).

The overseas creditors have mainly come from the Hong Kong Special Administrative Region, Taiwan Province, the United States, Japan, Switzerland and Southeast Asia.

After four years of investigations and court hearings, the Guangdong High People's Court completed all the procedures for GITIC's bankruptcy case in February 2003. The creditors' recovery rate reached 12.54 percent.

A total of 2.536 billion yuan (US$306.7 million) were equally repaid to GITIC's creditors.

The payment has mainly come from public auctions of GITIC's properties, including the 63-storey GITIC Plaza.

Established in 1980, GITIC was once a window company of Guangdong Province.

GITIC was also one of the major financial institutions in China empowered to issue bonds abroad, playing an important role in Guangdong's using overseas investment in late 1980s and early 1990s.

(China Daily June 30, 2004)