China court jails scandal-hit Fanya metals exchange founder for 18 years - Xinhua
* Fanya founder Shan Jiuliang jailed for 18 yrs for
* Company behind exchange fined 1 bln yuan for illegal
* Minor metals bourse collapsed in 2015 and was taken over
* Sentence does not address where money is - Fanya investor
(Adds detail, background, investor reaction)
By Tom Daly and David Stanway
BEIJING/SHANGHAI, March 22 (Reuters) - A Chinese court on
Friday fined the firm behind the now-defunct Fanya Nonferrous
Metals Exchange 1 billion yuan ($149.04 million) for illegal
fundraising and handed its founder a lengthy prison term, the
official Xinhua news agency reported.
The Kunming Intermediate People's Court sentenced Shan
Jiuliang, who founded and ran the minor metals bourse, to 18
years in prison for crimes including embezzlement, according to
a Xinhua report carried on the court's website.
Shan, whose company was said to have caused investors "huge
economic losses," was also fined 500,000 yuan and had 50 million
yuan of his personal property confiscated, the report added.
The Fanya exchange was launched in 2011 in Kunming, in
southwest China's Yunnan province, with the aim of raising the
prices of minor metals like bismuth by building up stockpiles
using money borrowed from thousands of individual investors.
But the exchange froze transactions and members' accounts in
2015 after experiencing "liquidity" problems and was later taken
over by government investigators.
The same Kunming court had in January attempted to raise
funds to pay off investors owed nearly 40 billion yuan by
auctioning off the bourse's inventories of indium, a silvery
metal used in flat-panel screens and semi-conductors, on Chinese
e-commerce platform Taobao.
The sale ultimately attracted no bids.
Asked on Friday if the court's decision was good news, one
former Fanya investor said it had fallen short of the investors'
expectations. "Where is the money? The key question is not
addressed in the sentence," he said.
Besides Shan, 20 other defendants are facing criminal
charges for Fanya-related crimes, Xinhua said. These include
Yang Guohong, the former vice president of the exchange, who is
accused of illegally appropriating property by abusing his
Reuters was not immediately able to reach Shan, Yang or
their representatives for comment.
($1 = 6.7098 Chinese yuan)
(Reporting by Tom Daly in BEIJING and David Stanway in
SHANGHAI; Editing by Gopakumar Warrier and Shreejay Sinha)
First Published: 2019-03-22 10:53:46
Updated 2019-03-22 12:22:54
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