A BUSINESSMAN stood trial at the Shenzhen Intermediate People’s Court on Monday over a scam in which he profiteered hundreds of millions of yuan to repay his debts, the Southern Metropolis Daily reported yesterday.

    The defendant, surnamed Long, has invested in several pieces of land in Shenzhen and Dongguan since 2008 totaling 110 million yuan (US$16.18 million), which included 40 million yuan he had borrowed from private lenders and loan sharks.

    As Long failed to repay his debts, he transferred 75 percent of his company to a private lender, surnamed Zhong, in March 2011 to borrow another 200 million yuan.

    According to the prosecutors, Long had lost controlling power of his company in October 2011, but he forged the company’s official seal and from repeatedly sold or mortgaged 163 of the company’s apartments 2012 to 2015 to repay his debts.

    An audit showed that Long had received payments totaling 450 million yuan from 203 homebuyers. He repaid 280 million yuan to 71 creditors and spent 65.96 million yuan in paying a project’s engineering cost and 26.13 million yuan in covering the company’s daily expenses. He also paid commissions of 13.85 million yuan to those who introduced homebuyers to him.

    He also earned 980 million yuan by mortgaging the company’s apartments, stores and parking spaces. A total of 127 apartments were both sold and mortgaged by Long, including one apartment that had been sold to five different homebuyers at the same time.

    According to the report, Long pleaded guilty to the charge of contract fraud during the hearing, but he said that he didn’t have any choice, because the creditors had threatened to hurt his family in order to make him repay his debts. Besides, Long denied the charge of forging the company’s seal, because he believed it was not illegal to make a copy of his own company’s seal.

    Long was also allegedly involved in another case of fraud. According to the prosecutors, he had cheated a victim, surnamed Zhang, into giving him the land use permits and other certificates of a villa in Dapeng New Area in April 2014, by promising to help Zhang get a property rights certificate for the villa.

    In October 2014, he forged Zhang’s signature and transferred the villa to one of his debtors, surnamed Tong, as a repayment for 10 million yuan that he owed Tong.

    But Long denied the charge during the hearing, saying that he owned the villa, which he had bought for 15.6 million yuan in 2012. He said that he gave the villa’s land use permit and other certificates to Zhang because Zhang had lent him money to help him purchase the villa, and Zhang was only returning the certificates to him after he repaid the debt in 2014.

    Long said that Zhang had asked him to sign two documents — one declaring that he wasn’t the owner of the villa and the other declaring that he had borrowed the certificates from Zhang — when he was in custody in 2015. He said he hadn’t expected Zhang would use these documents against him.

    During the hearing, Long also said that he had borrowed a total of 900 million yuan in high interest loans and had already repaid 2.4 billion yuan, but he might not be able to repay all of his debt before he dies. (Zhang Yang)