November 4, 2008
Zhu Yaoming, a convict who had earlier been sentenced 14 years on multiple-charges of financial skullduggery including loan fraud and bribery, was in court again yesterday in Nanjing. The 52 year old man was accused of “manipulating stock prices” between January 1999 and June 2003.
According to Zhu, he had confessed to the crime of market manipulation in 2003 when he was first arrested. However, while he was jailed for loan fraud and bribery, the manipulation charge was not prosecuted.
It was not until four years later that the market manipulation charge finally found him, and Zhu even felt relieved. He turned down a lawyer the court assigned to him and admitted the charge against him immediately.
The article did not state why the market manipulation charge was prosecuted at this time.
Zhu’s method, as reported by the article, doesn’t seem to be very sophisticated: He bought thousands of Identity Cards (身份证) from older peasants for 10 to 50 yuan each. Using these IDs, Zhu set up a total of 6,509 stock exchange accounts, creating an appearance of high demand for shares in Hubei Biocause Pharmaceutical company by frequent trading between these fraudulent accounts. Such artificial transactions raised the stock’s price from nine yuan to 25 yuan in 2000. At the peak of his illegal trading activities, Zhu had about 5 billion yuan of capital and revenues of 300 million. However, as the market hit a downturn, Zhu lost most of the money he had made. In 2003, he was arrested and put in prison for loan fraud.
The court has not yet delivered its ruling on the market manipulation charges.
- Yangtse Evening Post via Xinhua (Chinese): Zhu Yaoming was on trial for artificial trading