Stock price riggers sent to slammer ( 2003-09-27 09:23) (China Daily)
Two senior executives from Guangdong Yorkpoint Science and Technology Co each
received prison sentence of three years and six months on Thursday for illegally
rigging stock prices.
Li Hongqing, the company's vice-president and financial director, and Luo
Jianzi, manager of Yorkpoint's property section, were sentenced at Guangzhou
Intermediate People's Court in South China's Guangdong Province.
For the same offence, Cheng Bingfang, manager of the company's capital
operations section, was sentenced to two years and nine months in prison and He
Xinxiang and Wang Qi, who both worked in that section, received sentences of two
years and three months respectively.
The five were convicted of illegally rigging public stock prices when they
were in office and illegally earning more than 400 million yuan (US$48.2
million) through purchasing and reselling stock. A court official said on
Thursday the case was the province's first involving rigged stock prices.
The convicted individuals illegally rigged the company's share prices to earn
substantial profits between October 1998 and February 2001.
The company's stock was worth only 7.55 yuan (about 90 cents) per share in
September 1998, and rose to 34 yuan (US$4.10) one year later and then peaked at
126.31 yuan (US$15.20) in February 2000.
According to the court, Luo Cheng, the chairman of Yorkpoint, illegally
collected more than 3.7 billion yuan (US$446 million) through purchasing stocks
during that period. Luo Cheng escaped after the scandal was uncovered and is
still wanted by the police.
More than 80 individual investors in Yorkpoint from around the country sued
the company and also asked for compensation.
The individual stock holders said they have each lost at least 30,000 yuan
(US$3,610), with some having lost more than 700,000 yuan (US$84,300) because of
the rigged stock prices.
