SHANGHAI - A Chinese property developer has been
sentenced to death for an illegal fundraising scheme involving 5.5
billion yuan ($870 million), state media said Wednesday.
Ji Wenhua, head of the Yintai Real Estate Investment Co in eastern
Zhejiang province's Lishui city, raised the funds from the public
between 2003 and 2008 by promising monthly returns as high as 12
percent, the Global Times reported.
Ji and others pooled money from more than 15,000 investors in
Zhejiang and the central province of Hunan, telling them the funds
would be used for property development and promising high returns
amid rising real estate prices.
The scam continued until they were detained by authorities in
September 2008, after the firm collapsed due to the global
financial crisis, the report said.
A local court on Monday also sentenced five other people in the
case, including three of Ji's relatives -- two of whom were given
suspended death sentences and another life in jail.
The two others worked for the property firm and were both sentenced
to three years in jail.
Underground lending has flourished in some Chinese cities after
authorities tightened credit to fight inflation, causing banks to
favour large state-owned enterprises over smaller private
companies.
China's private lending market is worth an estimated four trillion
yuan -- or 10 percent of gross domestic product.
Another city in Zhejiang -- Wenzhou, which has a flourishing
underground lending market -- has been hit by a credit crunch after
dozens of business owners unable to repay their debts ran
away.
- AFP /ls