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July 10, 2019

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Conviction in Kuailu fraudulent case upheld

A conviction for fraudulently raising funds of Shanghai Kuailu Investment Group was upheld on appeal yesterday.

The Shanghai Higher People’s Court made a final judgment on the series of appeals in the Kuailu case, dismissing the appeal and sustaining the original ruling.

The three defendant companies — Shanghai Kuailu Investment Group Co, Shanghai Changning East Hongqiao Small-Sum Credit Co and Shanghai East Hongqiao Bonding Co — and 15 defendants including Huang Jialiu, Wei Yanping, Zhou Mengmeng and Xu Qi were convicted of fraudulent fundraising and illegal collection of public deposits.

In January, Shanghai No. 1 Intermediate People’s Court fined Kuailu 1.5 billion yuan (US$220 million) for fraudulently raising funds.

Two other companies in the case, East Hongqiao Small-Sum Credit Co and East Hongqiao Bonding Co, both closely linked to Kuailu, were fined 200 million yuan each, with 15 of their executives jailed.

Fabricated evidence

Huang Jialiu, chairman of East Hongqiao Bonding, and Wei Yanping, former chairman of Kuailu Investment, were sentenced to life in prison, while Xu Qi, former chairman of Kuailu Investment, was fined and sentenced to 13 years in prison. Another 12 defendants were fined and jailed for at least nine years.

Between March 2014 and April 2016, East Hongqiao Small-Sum Credit Co fabricated large amounts of evidence of indebtedness and East Hongqiao Bonding Co posted guarantees at Kuailu’s request, prosecutors said.

Kuailu and its affiliates, without any regulatory permit or registration, lured investors with the promise of high returns and illegally collected more than 43.4 billion yuan from the public — only about 28.2 billion yuan was used to pay back the principal and interest to earlier investors.

After the judgment was handed down in the first trial, 14 defendants, including Huang, appealed against the verdict.

The Shanghai Higher People’s Court formed a collegiate bench to conduct the trial in accordance with the law, and then decided there was no improper sentencing in the first trial, thus the appeal was dismissed and the original judgment was upheld.


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