Two managers at a Beijing office of the State-owned Guangdong Securities Company have been accused of embezzling 315 million yuan (US$39 million) of public funds.

The Beijing Haidian District People's Court heard the case yesterday for the first time.

The two accused, 42-year-old Rao Jinliang and 29-year-old Zhu Jie, denied they had made any profit from illegal actions.

According to the indictment by the public prosecutor, Rao and Zhu illegally misdirected money, in the form of treasury bonds, from the account of a Beijing-based international trade company to that of a consulting company in July 2003.

At the time, Rao and Zhu were manager and vice-manager of the Beijing Changchunqiao Street Office under the Guangdong Securities Company.

It is alleged that they illegally sold treasury bonds from the international trade company's account, which had originally been bought for 20 million yuan (US$2.5 million).

The buyback fund of 19 million yuan (US$2.3 million) was also taken by the consulting company and not returned.

From 2002 to 2004, it is also alleged that the two illegally deposited more treasury bonds in the account of the consulting company, before selling the bonds for 296 million yuan(US$36 million).

According to prosecutors, the consulting company also withdrew and spent money which has not yet been repaid.

Rao and Zhu were arrested in March last year.

The public prosecutor accused Rao and Zhu of violating the Criminal Law by embezzling public funds and abusing their power.

However, Rao and Zhu insisted that they only made transactions on behalf of the company.

Zhu said it is common practice in the stock industry to sell treasury bonds from one company to raise cash to invest in another.

(China Daily October 13, 2005)