Chinese Tycoon Hit By 'curse of the Rich List'

The youngest known member of China’s super-rich elite was sentenced to life in prison today, the latest in a long line of tycoons to fall foul of the authorities within a year of their fortunes becoming public knowledge.

Amid a crackdown on corrupt and fast-living executives and officials, Zhou Yiming, 32, was found guilty of fabricating financial reports to secure loans of 380m yuan (£27m) from three banks.

Zhou used the money to buy a 28% stake in Sichuan Mingxing Electric, a major supplier of water, electricity and gas to 3.8 million residents in south-west China.

He and his accomplices then channelled £38m of the utility’s revenues into his own pockets, said the Suining intermediate people’s court in jailing Zhou for life. Five others were given prison terms of more than three years.

"The verdict shows China’s determination to fight crimes related to stock markets," the state-controlled Xinhua news agency quoted Tang Qingyang, an expert on economic law, as saying.

Educated after Beijing began its market-orientated economic reforms, Zhou is a member of a generation in a hurry to make money. His personal wealth was estimated at £68m in the latest Forbes list of China’s richest 400 people. The average age of those on the list was 46.5, more than 20 years younger than the top 400 in the United States.

The stigma attached to wealth during Mao Zedong’s era is wearing off, but there is still considerable public suspicion that many fortunes have been made illegally.

Tycoons are increasingly splashing out on expensive status symbols, such as designer clothes, jewellery and luxury cars. China is now Rolls Royce’s third biggest market after a 50% surge in sales last year. By the end of December, Porsche expected to double the 857 vehicles it sold in 2005.

But an ostentatious lifestyle and inclusion in a rich list invites scrutiny from tax officials and auditors. In what the domestic media have dubbed "the curse of the rich list", several millionaires have found themselves in court or under investigation after being outed as wealthy.

According to the Chinese media, the richest man in China - Huang Guangyu -has been questioned regarding allegedly shady loans of £11m from the Bank of China. The 37-year-old head of the Gome electric appliance group denied any wrongdoing in amassing a fortune estimated at £1.3bn.

The number 16 on last year’s Forbes list, the developer Zhang Rongkun, is mired in Shanghai’s biggest corruption scandal of recent years. A team of about 100 state investigators have descended on China’s commercial capital to look into accusations that the city’s £6bn social insurance fund was misused.

While overseas attention has focused on the political implications of the investigation, which has resulted in the sacking of Shanghai Communist party secretary Chen Liangyu, much of the domestic coverage has dwelt upon the more salacious details of his many mistresses, who include a model and a hotel worker.

Such reports have become increasingly common in the past year as the Communist party attempts to cut down graft. Last month, the central government announced that 67,505 officials have been punished for corruption since 2003. But the problem remains endemic in a country with little electoral accountability, media oversight or judicial independence.