NANNING, Aug. 12 (Xinhua) -- An international manhunt is underway for a Chinese businessman who fled the country following allegations of fraud, authorities said Tuesday.
The International Criminal Police Organization (Interpol) has issued a red notice for Liao Rongna of the Zhengling Group, a private conglomerate based in Liuzhou City, south China's Guangxi Zhuang Autonomous Region. He is suspected of obtaining loans and investments under false pretenses and misappropriation of funds, according to Liuzhou public security bureau.
Liao, 58, is said to have cheated his way into several billion yuan of loans by promising investors high returns, then failed to repay the debt. Being found guilty of this kind of crime in China can result in a death sentence.
Liao's inner circle are just as embroiled in the racket as he. His wife, Ye Zhiqun, former vice chairman of the Zhengling board, is also on the run and his younger son, a former chairman of Zhengling, was detained by police in June, the bureau told Xinhua.
Liao Rongna's personal financial power seems to have been the key to the staggering amount of money he amassed. He was on the Hurun Rich List in 2009 and has always been regarded as the richest man in Liuzhou. The Zhengling Group covers a wide range of businesses -- automobiles, construction materials and logistics -- and was once one of the top 100 enterprises in Guangxi, so it is no surprise that he managed to woo investors into lending him huge sums on the promise of lucrative returns.
Li, another local entrepreneur, runs a business selling chemicals and cosmetics in Liuzhou. "I lent him 20 million yuan (3.25 million U.S. dollars) only this March, because he assured me that I could get a rate of 0.3 percent per day," said Li, who had previously splashed out 37 million yuan on a deal he thought was too good to be true. He was right. Liao has not paid back the money.
According to Li, people all over Guangxi mortgaged their houses and companies to local banks to raise funds for Liao, only to find the billionaire suddenly incommunicado.
Police found more than 1,500 loan contracts worth 3.2 billion yuan in Zhengling files during their investigation.
BOSSES ON THE LAM
In recent years, any number of millionaire businessmen like Liao, accused of fraud or simply out of their financial depth, have fled the country. Life abroad with large with large sums of other people's money is far preferable to dealing with bankruptcy or feeling the wrath of the domestic law.
For instance, Wang Li, chairwoman of Junlihao Group in Qingdao, Shandong Province, disappeared in April, owing at least 1.2 billion yuan. A month later, Huang Shuimu, head of Tiancheng Group in Fujian Province, vanished following a crisis in a capital chain. By the end of June this year, the bosses of 123 peer-to-peer online lending firms had absconded abroad.
Xia Xinping, a research fellow with Guangxi University of Science and Technology, believes economic fugitives abscond because of the low cost of running away.
"They accumulate huge debts in China, and evade them all by simply bailing out," Xia said.
Despite government action, only a small number of them have been repatriated so far, making flight the optimum solution for the disaffected super-rich.
GOVERNMENT ON THE HUNT
The hunt for the fugitives is on. In July, the government campaign Fox Hunt 2014 began to track down suspects of economic crime who have fled the country.
"China has extradition treaties with more and more countries now, which certainly helps the campaign," said Wang Yukai, a professor at the Chinese Academy of Governance.
China has been a member of Interpol since 1984. Since 2008, more than 730 suspects of economic crimes have been repatriated to China from 54 countries and regions.
In a national teleconference in July, officials with the Ministry of Public Security called on police authorities to urge suspects to give themselves up and to offer rewards for information from the public that leads to arrests.
"Even if they are in the farthest corners of the world, we will find them, seize them and bring them to justice," said Liu.