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Fall From Grace
China's once-richest man is sentenced to life in prison
By MIA TURNER

May 30, 2000
Web posted at 6:45 p.m. Hong Kong time, 6:45 a.m. EDT

Mou Qizhong liked to say he represented the incarnation of new economic reforms, but this morning China's once-richest man was sentenced to life in prison for fraud. The 58-year-old flamboyant tycoon and one of the mainland's most famous private businessmen--as chairman of the ailing Tianjin-based Land Economic Group--was found guilty of defrauding a state bank of $75 million using letters of credit between August 1995 and July 1996. State television said the company also was fined $603,000 and an unspecified number of Mou's business associates were sentenced to prison terms.

Mou, a one-time farmer, made his fortune in 1992 when he traded 500 railroad cars filled with cheap, surplus Chinese textiles, electronic goods and pork for four Russian passenger jets, which he sold to a small Chinese airline, earning him a cool $11 million. Three years later, Mou decided to launch a series of satellites from Kazakhstan. It was for this purpose he reportedly needed the $75 million. While two satellites were launched, there was little revenue coming in. And before his formal arrest in February 1999, Mou's company was shackled with debts of around 400 million yuan ($48 million).

In a highly publicized, one-day trial in Wuhan last November, attended by hundreds of Chinese journalists and spectators, Mou's lawyers noted that as a private company, Land Group did not have a foreign trade license and could not borrow foreign exchange. They said Mou--who was pleading not guilty--borrowed the money from a Chinese man living in Australia named He. Wuhan police reportedly briefly detained He in August 1998 but released him after he paid 2 million yuan ($242,000). He is believed to be still in Australia.

It is not the first time that the high-flying Mou has encountered the law During the chaotic 1966-76 Cultural Revolution, he was condemned to death for criticizing the leadership and co-writing a book entitled, Where Is China Heading? But after Mao Zedong's death in 1976, the sentence was lifted, and he was released from jail in 1979.

After his trial last year, he wrote to the Communist Party Central Committee appealing for help. "What the steel and oil barons of the West did at the start of this century, Mou Qizhong of the east can do better at the start of the 21st century," he wrote.

Mou has already announced that he will appeal this latest sentence.