SHANGHAI - A Chinese
property developer has been sentenced to death for an illegal
fundraising scheme involving 5.5 billion yuan ($870 million), state
media said Wednesday.
Ji Wenhua, head of the Yintai Real Estate
Investment Co in eastern Zhejiang province's Lishui city, raised the
funds from the public between 2003 and 2008 by promising monthly returns
as high as 12 percent, the Global Times reported.
Ji and others
pooled money from more than 15,000 investors in Zhejiang and the central
province of Hunan, telling them the funds would be used for property
development and promising high returns amid rising real estate prices.
The
scam continued until they were detained by authorities in September
2008, after the firm collapsed due to the global financial crisis, the
report said.
A local court on Monday also sentenced five other
people in the case, including three of Ji's relatives -- two of whom
were given suspended death sentences and another life in jail.
The two others worked for the property firm and were both sentenced to three years in jail.
Underground
lending has flourished in some Chinese cities after authorities
tightened credit to fight inflation, causing banks to favour large
state-owned enterprises over smaller private companies.
China's private lending market is worth an estimated four trillion yuan -- or 10 percent of gross domestic product.
Another
city in Zhejiang -- Wenzhou, which has a flourishing underground
lending market -- has been hit by a credit crunch after dozens of
business owners unable to repay their debts ran away.
- AFP /ls