Judge in inquiry over mine shares
By Jane Chen |
May 26, 2010, Wednesday
|
Print Edition
Print Edition
A NORTHWEST China county judge's initial legal victory to demand back 11 million yuan (US$1.6 million) in dividends from a local mine owner has sparked a disciplinary investigation into his own conduct.
The Party committee of Shenmu County in Shaanxi Province is investigating how Zhang Jifeng, 46, a judge with Shenmu People's Court, obtained the shares in the mine and whether it is against the law, yesterday's Chinese Business View reported.
Authorities demanded the investigation following a media report of Zhang's lawsuit against a mine owner surnamed Chen over unpaid dividends.
Zhang told the Hengshan County People's Court that he sold his apartment for 430,000 yuan and raised other money from his friends to invest a total of 1.8 million yuan in Chen's mine in 2005, accounting for 10 percent of the mine's total investment, the report said.
He received 6.6 million yuan as dividends in the next two years but little later.
He didn't learn until 2008 that Chen had sold two-thirds of the mine shares to two other new investors in 2007 while the mine's total investment was floated to 50 million yuan. The new investors offered only 3 million yuan to Zhang.
Zhang then asked Chen to pay back 11 million yuan of the unpaid dividends for the two years, valuing his 10 percent shares at 50 million yuan.
The Hengshan court supported Zhang's lawsuit in the first trial and ordered Chen to pay. But Chen appealed to a higher court, alleging that Zhang, as a government worker, acted illegally in investing in mines.
China bans government workers from engaging in for-profit businesses.
And a state rule issued in August 2005 prohibited all government workers from investing in mines and ordered those who already had made investments withdraw their shares by September 22, 2005.
Zhang said he knew it was illegal to invest in the mine and he was reluctant to file the lawsuit and publicize his ownership of the shares.
But he was forced to do so because most of his investment was from his friends and he felt obliged to ask back the profit for them.
The Party committee of Shenmu County in Shaanxi Province is investigating how Zhang Jifeng, 46, a judge with Shenmu People's Court, obtained the shares in the mine and whether it is against the law, yesterday's Chinese Business View reported.
Authorities demanded the investigation following a media report of Zhang's lawsuit against a mine owner surnamed Chen over unpaid dividends.
Zhang told the Hengshan County People's Court that he sold his apartment for 430,000 yuan and raised other money from his friends to invest a total of 1.8 million yuan in Chen's mine in 2005, accounting for 10 percent of the mine's total investment, the report said.
He received 6.6 million yuan as dividends in the next two years but little later.
He didn't learn until 2008 that Chen had sold two-thirds of the mine shares to two other new investors in 2007 while the mine's total investment was floated to 50 million yuan. The new investors offered only 3 million yuan to Zhang.
Zhang then asked Chen to pay back 11 million yuan of the unpaid dividends for the two years, valuing his 10 percent shares at 50 million yuan.
The Hengshan court supported Zhang's lawsuit in the first trial and ordered Chen to pay. But Chen appealed to a higher court, alleging that Zhang, as a government worker, acted illegally in investing in mines.
China bans government workers from engaging in for-profit businesses.
And a state rule issued in August 2005 prohibited all government workers from investing in mines and ordered those who already had made investments withdraw their shares by September 22, 2005.
Zhang said he knew it was illegal to invest in the mine and he was reluctant to file the lawsuit and publicize his ownership of the shares.
But he was forced to do so because most of his investment was from his friends and he felt obliged to ask back the profit for them.
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