Gu Chujun, former chairman of Guangdong Kelon Electrical Holdings Co Ltd, appeared in court yesterday on charges of embezzling public funds.

Gu, 47, was arrested in September last year on suspicion of "economic crimes" a term that in China refers to a range of violations including fraud and embezzlement.

The Foshan procuratorate accused Gu of four crimes, including registered capital and accounting fraud, misappropriating funds, and functionary embezzlement during his time with Kelon, China's biggest refrigerator maker based in Foshan, South China's Guangdong Province.

Gu entered China's capital market in 2000 and took over Kelon in early October 2001.

Before his arrest last year Gu was in control of five listed companies: Greencool Technology, Kelon, Hefei Meiling A-share, Xiangyang Automobile Bearing and Yangzhou Yaxing Motor Coach.

Also in court yesterday were eight of Gu's assistants and subordinates including Jiang Baojun, Zhang Hong, Liu Yizhong, Zhang Xihan, Yan Yousong, Yan Guoru, Liu Ke and recently arrested Zeng Junhong.

Sources from the Foshan procuratorate said the eight had developed a "close relationship" with Gu.

According to the procuratorate, funds involved in the case totalled nearly 1.8 billion yuan (US$228 million).

A five-member prosecution group is involved in Gu's trial, headed by a deputy law officer of the Foshan procuratorate.

"We still have not come up with a decision as to whether we should plead innocent to the court," Li Guifang, Gu's lawyer, said in an interview with China Daily yesterday.

According to Li, the trial will last three days.

Early reports said that Gu would plead guilty. However, Li said there was some "positive evidence" that may be a turning point for Gu's case.

"We will wait and see how we will plead for Gu after the first day's trial," said Li, adding that it is hard to predict the final verdict as Gu has been accused of four crimes involving large sums of money.

As yesterday's trial mainly involved evidence from the prosecution, Gu and the eight others did not make any defence to the court.

According to China's Criminal Law, Gu could be sentenced to 3 to 10 years' imprisonment if he is found guilty.

Gu's trial came after that of former president and CEO of the Jianlibao Group, Zhang Hai, which is also based in Foshan.

Zhang, who was also accused of embezzling public funds worth 235 million yuan (US$29.7 million) during his time with the company, appeared in court in Foshan last Thursday.

Sources from the Foshan Intermediate People's Court would not comment on the verdict against Zhang after the three-day trial.

(China Daily November 8, 2006)