Chinese former real estate executive gets 18 years in prison for embezzlement and taking bribes

PHOTO: The Straits Times file

The Beijing Second Intermediate People's Court sentenced Ren Zhiqiang, former chairman of State-owned Beijing Huayuan Group, to 18 years in prison on Sept 22 for embezzlement, taking bribes, misappropriation of public funds and abuse of power.

The court also fined 4.2 million yuan (S$850,000).

Given that Ren voluntarily confessed, and that all of his illegal gains have been recovered, the court adopted the sentencing recommendation from the public prosecution authority and made a combined punishment for multiple crimes. Ren pleaded guilty in court and said he will not appeal.

Ren, 69, was appointed general manager of Huayuan Group in 1993 and later became the group's chairman. He was also the chairman of Huayuan Property, a listed subsidiary of Huayuan Group, and Beijing Huayuan Real Estate, which is wholly-owned by Huayuan Property.

The court said that Ren embezzled over 49.7 million yuan of public funds, 36.4 million of which was paid to his son under the category of "financial advisory fees" while handling two loans from trust companies to Huayuan Real Estate from 2012 to 2014 through signing false agreements.

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The court said that Ren was fully aware of the fact that his son did not provide intermediary services during the two loan processes, but Ren agreed to pay the advisory fees.

In addition, Ren pocketed 13.3 million yuan in excessive salary, which should be returned to the company. He listed the money on the company's financial account and claimed the money after retirement, which was also recognized as corruption by the court.

In May 2008, Beijing's Xicheng district State-owned assets supervision and administration commission issued a document to cap the salaries of operators of the district's State-owned and State-controlled enterprises.

According to the document, Ren was required to return the excess part of the salary received in the subordinate enterprises of the Huayuan Group.

From 2009 to 2010, Ren didn't take the excess and asked the financial staff to put that money into Huayuan Real Estate's financial account under a specific heading. He later collected the 13.3 million yuan after his retirement in 2015.

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The court also found that from 2003 to 2013, Ren misappropriated a total of 61.2 million yuan of public funds, spread over three occasions, to benefit himself and his employees and shareholders.

Ren repeatedly violated regulations that banned Beijing Huayuan Haoli Investment-which was jointly invested in and established by employees of Huayuan Group and its subsidiaries in 2002 to represent the employees-from engaging in other business and investment activities, or lending or borrowing funds with Huayuan Group and Huayuan Property.

In August 2003, Ren and others misappropriated 11.2 million yuan from Beijing Huayuan Yingdu Real Estate Development and lent the money to Haoli Investment to invest in a project owned by Huayuan Group. Ren personally earned over 19 million yuan from the project.

A month later, Ren diverted Haoli Investment's 30 million yuan to buy the investment company's shares for himself and other employees from Huayuan Group, then repaid the diverted money by using the dividends from Huayuan Property in the following years.

Additionally, due to Ren's violation of regulations and abuse of power during his tenure as chairman of Huayuan Group, Huayuan Property and Huayuan Real Estate, he caused over 116 million yuan of losses for State-owned holding enterprises, of which Huayuan Group lost 53.7 million yuan.

From 2004 to 2014, Ren took advantage of his positions and provided assistance to a company in matters such as providing equipment to Huayuan Property and its affiliated companies. In return, from 2012 to 2017, Ren received a total of over 1.25 million yuan in house decoration payments from the company.