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Rachel Lu

China’s Madoff Executed Without Notifying Family, Internet in Uproar

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Zeng Chengjie (Via Weibo)

Zeng Chengjie, a self-made businessman who pulled himself up by the bootstraps from abject poverty to become a powerful real estate developer, was showered with accolades and superfluous praises for most of his life. In 2006, the local state-owned media in Hunan, his home province, wrote a glowing profile of the “diligent, wise and conscientious man,” concluding that “the future, for Zeng, is starting new ventures, new glories and new legends!”

But the future had other plans. Zeng was executed on July 12, 2013 by lethal injection. [Update: Zeng's family initially believed that he was executed by legal injection, but Zeng's daughter later received an official letter stating that Zeng was executed by a firing squad.] His crimes were illegal fundraising activities and financial fraud. He allegedly defrauded more than 57,000 investors out of approximately RMB2.8 billion (US$460 million), of which RMB1.7 billion had been returned. He used the money to fund his company that bid for urban development projects, including key local landmarks and public facilities, in Jishou, a small city in Hunan.

Zeng's daughter with a photo of her father
Zeng’s daughter with a photo of her father (via Weibo)

Zeng’s family was not notified before his execution, and did not see his body before it was cremated. Zeng’s daughter used an account on Sina Weibo, China’s Twitter, @曾成杰之女 to protest her father’s trial and execution.

According to Zeng’s daughter, the local government encouraged Zeng’s fundraising activities and worked very closely with Zeng on the projects. However, new policy winds swept in around 2009, and Party members took out their investments first, leading to widespread panic among ordinary investors. According to Zeng’s daughter, her father was left holding the bag — he was swiftly imprisoned and his assets were sold under suspicious circumstances.

A state-owned asset company, according to Zeng’s attorney, picked up the pieces and gained a huge profit from Zeng’s fall from grace.

Zeng’s case bears strikingly resemblance to that of Wu Ying, a young business woman in Zhejiang Province who was also the darling of the state-owned media before she was accused of running a Ponzi scheme. Wu was handed a death sentence too, but she received a reprieve after a tidal wave of Internet support for her prompted a review from the Supreme People’s Court.

While most Chinese people still support the death penalty, executing non-violent, white collar criminals for economic crimes has become very controversial. Alleged official misconduct in these cases often become contentious issues, as local governments  inevitably play some role in serious economic cases. Supporters for Wu Ying have implied that her trial was an attempt to silence her before she could blow the whistle on local corruption. According to Zeng’s daughter, China’s supreme court approved Zeng’s death sentence after the party boss of Hunan at the time of Zeng’s conviction became the chief justice.

Faced with questions about Zeng’s secret execution, the Intermediate People’s Court in Changsha tweeted on Sina Weibo that China’s laws do not decree that a death row inmate must meet with his family before execution, but astute Internet users pointed out that the Supreme People’s Court did in fact issue an interpretation that gives death row inmates the right to meet with family. The Changsha intermediate court soon deleted the tweet, but Internet users had already taken screenshots of its tweet, as evidence of the sloppy nature of the case’s handling and the potential deprivation of due process.

@yffs116 tweeted,

Zeng’s case is interesting, not because there is doubt about his innocence. The point is that the case provides us with a picture of the eco-system of China’s business environment, from which we get a glimpse of the awkward situation of China’s business people — how lucky the winners are, how unfortunate the losers are, and how scary it is when political power mix with business life.

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Side by side comparison of Changsha Intermediate Court’s tweet and the supreme court’s interpretation (Via Weibo)

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Rachel Lu

Rachel Lu is a co-founder of Tea Leaf Nation. Rachel traces her ancestry to Southern China. She spent much of her childhood memorizing Chinese poetry. After long stints in New York, New Haven and Cambridge, she has returned to China to bear witness to its great transformation. She is currently based in China.
  • zhonguoren

    what a shitty country

  • Michael Speth

    Its too bad the USA doesn’t have the death penalty for white collar crime. I guess I would settle for life imprisonment for all of the execs at AIG, etc.

  • XYZ

    According to Zheng’s daughter … not according Zheng’s daughter. Still a really good article ~

  • http://www.niallbradley.net/ Niall Bradley

    Executing white collar criminals for economic crimes is a great idea, precisely because they are extremely violent – Wall Street starts and finances wars fer gawd’s sake!