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Health products manager admits to smuggling

THE local distributor of Phiten, a popular health product, and its Japanese general manager were accused of smuggling goods with three import agencies and avoiding 4.36 million yuan (US$636,124) in taxes at a hearing yesterday.

Tanaka Yutaka, 65, general manager of Phiten International Trade (Shanghai) Co Ltd, admitted to the smuggling in the Shanghai No. 1 Intermediate People's Court but said he had avoided only 1.5 million yuan in taxes.

Phiten makes neck and wrist rings that contain titanium and are claimed to help relax the body and ease muscle aches. They were introduced to China four years ago.

Prosecutors alleged that from December 2006 to September 2007 Phiten entrusted the Shanghai Muntbatten Import and Export Co Ltd to import Phiten products and the Shanghai Huacheng International Freight Co Ltd and the Shanghai Huacheng Shipping Co Ltd to transport the goods. They alleged Tanaka conspired with Li Mingbao, who controlled the three companies, to report reduced values of goods to Customs to reduce tax liability.

Li will be dealt with in separate proceedings.

Prosecutors also alleged Wang Chen, an administrative section chief of Phiten, who made settlement with the agencies under instruction from Tanaka, and Bi Rao, an employee of Muntbatten, made out invoices with lower prices and false contracts.

The three businesses and two other individuals are also listed as defendants.

Tanaka denied he had conspired with Li and said it was Wang who discussed false reporting with Li when he was absent.

He claimed Li imported the first batch of goods and evaded 900,000 yuan tax in early 2007 without telling him. He said he found out only after it had happened.

But Wang said Tanaka had known about the smuggling and had agreed to it.

The court didn't announce a verdict after the hearing.


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