A gang of six appeared in court yesterday accused of selling counterfeit cigarettes and illegally selling genuine ones. They allegedly earned nearly 50 million yuan (US$6.2 million) from the business in about five years.

If convicted, Zhang Tingqun, the suspected ringleader, will face a jail term of more than 15 years for selling fake products and running a business without authorization. Shanghai No 1 Intermediate People's Court held a first hearing yesterday.

Over a five-year-period from July 2000, Zhang opened 14 cigarette shops in the city's Xuhui and Minhang districts without obtaining either tobacco concessionary certificates or business licence. He also rented or purchased another 45 tobacco shops without a franchise certificate.

According to Chinese law, the State exercises monopoly administration over the production, sale, import and export of tobacco commodities. Only authorized enterprises and people can sell and produce tobacco products.

Up until February this year, the 59 shops had sold 244,500 packets of cigarettes at 24.9 million yuan (US$3.1 million) according to the account books kept by Zhang Jinghua, an accomplice. Police also found more than 1,400 packs of cigarettes, worth 118,000 yuan (US$14,500), in raids at the shops.

Zhang began selling fake cigarettes in the shops in December 2003.

He hired several people to help run the shops. By February this year, Zhang had sold 57,000 packets of fake cigarettes at 24 million yuan (US$3 million). More than 1,900 packs of counterfeit cigarettes were also found at addresses when the gang were arrested.

(China Daily December 7, 2005)