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Chinese executive 'confesses' to $800m fraud
by Staff Writers
Shanghai (AFP) May 16, 2016


China says Taiwan fraud suspects deported from Malaysia 'confess'
Taipei (AFP) May 16, 2016 - A group of Taiwanese fraud suspects deported from Malaysia to China have confessed and will be tried on the mainland, according to Chinese authorities, despite an angry Taipei demanding they face justice at home.

The expulsion of the 32 suspects from Malaysia in April came after another group of Taiwanese fraud suspects were sent to China from Kenya, a move described by Taiwan as "abduction".

The deportations are seen by observers as a means of exerting pressure on self-ruling Taiwan's new president Tsai Ing-wen, who takes office on Friday and has a far more sceptical approach to relations with Beijing than her China-friendly predecessor did.

Taiwan has lodged formal complaints with China over the deportations and has insisted its nationals face investigation and trial on the island.

Beijing says it wants to try the suspects deported from Malaysia on the mainland because they were part of a telecom fraud ring that targeted Chinese victims. China's Ministry of Public Security said they will undergo proceedings under the "mainland judiciary".

"The 32 Taiwanese suspects confessed to committing fraud and have been detained according to law," mainland police said, according to the official Xinhua news agency.

But Taiwan insisted the case was still under investigation.

"Both sides are working together," Chen Wen-chi, who heads cross-strait legal affairs at the Ministry of Justice, told AFP.

Chen, who led a delegation to meet mainland police and discuss the case over the weekend, said the location for the suspects' trial would be "negotiated at a later time".

The Xinhua report quoted a 72-year-old cancer patient who was tricked into depositing two million yuan ($152,835) into a "safety account" as part of the fraud scheme.

"This is my medical savings and it's all been cheated," said the woman surnamed Guo.

"I hope Taiwan will hand these crooks over to the mainland so they can be punished by law," she said.

Twenty other Taiwanese suspects arrested in the Malaysia raids were deported back to Taiwan last month and are currently under investigation.

Chinese state media has also said previously that the Kenya suspects have admitted their guilt and will be tried on the mainland.

Taiwan is self-ruling after splitting with the mainland in 1949, following a civil war, but China still sees it as part of its territory waiting to be reunified.

The alleged mastermind of a scam which cost Chinese investors hundreds of millions of dollars lived in a penthouse flat featuring peacocks and fountains, reports said Monday after he was paraded on television confessing.

Xu Qin, described as the "controller" of Zhongjin Asset Management and its linked companies, was among 35 executives and employees formally arrested last week in connection with the scheme, state-run Dragon Television reported at the weekend.

It owes more than half its 25,000 investors a total of 5.2 billion yuan ($800 million) said the broadcaster, which is based in the commercial hub.

Xu, 35, was shown saying that the firm "paid back previous investors' principal and interest with money from new investors".

"It is actually a typical Ponzi scheme," he admitted.

He squandered around 500 million yuan of investors' money on luxury houses and cars with his wife, the report alleged.

It was the latest example of a suspect being shown on Chinese state television confessing to crimes, often before he or she has appeared in court.

Overseas rights groups have condemned the practice and say the interviews may be carried out under duress, with some senior Chinese lawyers also expressing concern.

Xu and his wife rented a 1,200 square metre (13,000 square foot) penthouse at one of China's most expensive developments, Tomson Riviera in Shanghai, where he raised peacocks and built fountains in his living room, state-run newspaper Jiefang Daily reported on Monday.

The case is the latest financial fraud to emerge as China's economy slows. In a recent scandal, peer-to-peer lending firm Ezubao bilked 900,000 investors out of $7.6 billion by offering high interest rates which it was unable to pay, in what one executive described in a televised confession as a "typical Ponzi scheme".

Police in Shanghai could not be reached for comment on Xu's confession, but previously said he registered more than 50 subsidiaries and controlled 100 linked companies.

Xu was detained with other executives at an airport in Shanghai last month as he attempted to fly to Italy on an chartered aircraft, according to previous reports.


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