Chinese Tycoon Sentenced to 3 Years

One of China’s richest men was ordered by a Shanghai court Tuesday to serve three years in prison for financial fraud, a sentence that drew criticism here and abroad as being unusually light and politically influenced.

The case of businessman Zhou Zhengyi -- a onetime street vendor who built a fortune in restaurants, then real estate -- drew particular attention because of his connections to one of China’s biggest banks and purported ties to top political leaders in Shanghai.

Zhou, 42, was arrested in September by Shanghai police on charges of falsifying documents and stock manipulation as the government cracked down on corruption.

Senior officials in Beijing have expressed concern about the growing number of financial misdeeds as the Chinese market economy develops.

The arrests of businesspeople accused of bribery, tax evasion and other so-called economic crimes have been publicized in recent months.

In some cases, such crimes are subject to the death penalty. Legal sources in China said the two crimes Zhou was charged with carried a maximum combined prison term of eight years.

The outcome, reported Tuesday by the state-run New China News Agency, was regarded by many as a slap on the wrist for the flamboyant Shanghai native, who faces separate allegations of unfairly displacing residents in his hometown to make way for his development project.

“Of course three years is ridiculous,” said Liu Qing, president of Human Rights in China, a New York-based group that has been following the case. “It’s obvious that he’s been treated in a special way.”

The tycoon had close ties to the former head of the Hong Kong unit of the state-owned Bank of China, which lent $227 million to a company owned by Zhou. That official, Liu Jinbao, was abruptly ousted last year amid an investigation into Zhou’s activities.

Zhou is also believed to have good connections with high government officials in Shanghai and perhaps Beijing. That may explain why Zhou’s two-day trial last month was shrouded in secrecy, with a virtual blackout in the Chinese media.

Zhou’s lawyer, Yan Yiming, said late Tuesday that he wasn’t aware of his client’s political clout. Yan said Zhou “wasn’t satisfied” with the outcome but would not appeal the ruling from the Shanghai No. 1 Intermediate People’s Court. The nine months that Zhou has spent in jail will be counted as part of the three-year sentence.

Nongkai Development Group, a Shanghai-based property firm controlled by Zhou, was fined about $4.8 million, according to the New China News Agency.

The news service also reported that Nongkai had revenue of $540 million in 2002 and that Zhou’s personal fortune was estimated at $320 million before his arrest last year.

Among those who voiced disappointment at Zhou’s sentence was Shen Ting of Hong Kong, whose parents were removed from their one-room apartment in downtown Shanghai. They were among hundreds of residents, many of modest means, who protested that Zhou’s firm had failed to provide adequate replacement housing or compensation.

“I cannot understand why it’s so light,” she said of the sentence.

Zhang Xiuying of The Times’ Shanghai Bureau contributed to this report.