Xinhua News Agency, Guangzhou, December 22nd (reported by Mao Yizhu) - Taking advantage of the rising price of gold in recent years, Huang Zhenjin, Ma Tianbao, Li Hanhu and 9 others set up "shell companies" to specialize in gold investment and financial management. In just four years, they defrauded 978 people, accumulating illegal gains amounting to more than 140 million yuan. On December 22nd, the Intermediate People's Court of Guangzhou City held its first trial for the case involving Huang Zhenjin and others' fraudulent fundraising.
The prosecution accused that in December 2004, Guangzhou Dakuaijin Industrial Investment Co., Ltd., which only had the qualification for gold investment consultation and no physical operation, was established. In May 2006, Huang Zhenjin, the actual controller of Guangzhou Dakuaijin, and Liang Xingmin (separately handled), met Ma Tianbao through the introduction of Li Hanhu. Under the arrangement of Huang Zhenjin, Li Hanhu, and Liang Xingmin, Ma Tianbao became the major shareholder and legal representative of Guangzhou Dakuaijin. In December 2006, Huang Zhenjin and others established Guangdong Dakuaijin Company at the original address of Guangzhou Dakuaijin, with Ma Tianbao as the legal representative, taking over Guangzhou Dakuaijin’s business.
Huang Zhenjin and others were fully aware that Guangdong Dakuaijin Company was not a banking financial institution and had not been approved by the People's Bank of China. They merely obtained the qualification to act as an agent for Zhongjin Gold Co., Ltd.'s clients but falsely claimed to customers that Guangdong Dakuaijin Company could act as an agent for gold investment and financial management, promising annual investment interest rates between 8% to 30%.
In February 2007, Huang Zhenjin and others used part of the illegally obtained funds to expand their "gold business" outside the province and invested in establishing Inner Mongolia Huixin Company (separately handled). Ma Tianbao, Li Hanhu and others used the illicit funds to secretly operate, allowing Inner Mongolia Huixin Company to obtain the comprehensive membership qualification of the Shanghai Gold Exchange.
On June 16th, 2008, Guangdong Dakuaijin Company and Inner Mongolia Huixin Company issued a joint announcement stating that Inner Mongolia Huixin Company would fulfill all agreement rights of the original Guangdong Dakuaijin Company's clients. By December of the same year, all office premises of Guangdong Dakuaijin Company and Inner Mongolia Huixin Company closed down and ceased operations. Huang Zhenjin and the other 12 defendants, along with other company staff, all fled.
Upon verification, Guangdong Dakuaijin Company and Inner Mongolia Huixin Company defrauded more than 146 million yuan from 978 victims. Apart from some funds used for daily company expenses, paying interest to investors, and setting up Inner Mongolia Huixin Company to obtain gold exchange membership qualifications, the rest of the funds were transferred or withdrawn and appropriated by the defendants Huang Zhenjin, Ma Tianbao, Li Hanhu and others.
The prosecution believed that Huang Zhenjin and the other 12 individuals used fraudulent methods to illegally raise funds, and their actions constituted the crime of fraudulent fundraising. Currently, the court will further review this case.