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Chairman Mou falls off his throne

Mou Qizhong, once a wacky, money-making 'reform hero,' now languishes in prison, as a mystery woman tries to free him. Unlike troubled Western tycoons such as Conrad Black, reports ROD MICKLEBURGH, he had no chance to defend himself

Globe and Mail Update

BEIJING — For much of the 1990s, when I was a correspondent here for The Globe and Mail, Mou Qizhong was the toast of China.The government hailed him as a ''reform hero,'' and he made the country's top-10 list of private entrepreneurs, as one of the richest men in China.

Journalists, including myself, flocked to interview the man made famous by his multimillion-dollar "socks-for-jets" deal, which brought him four Russian aircraft in return for 500 freight cars of cheap consumer goods.

He was great copy. Not only were many of his exploits and grandiose plans as bizarre as they were breathtaking, so was Mr. Mou.

With an uncanny physical resemblance to Mao Zedong, he took to combing his hair like Mao, swimming in the Yangtze River as Mao had done, ordering employees to study his "collected thoughts" and letting people know he didn't mind being referred to as Chairman Mou (pronounced "Moe").

How could one not delight in the marvellous madness of someone who talked seriously about bringing rain to parched regions of China by blasting a hole through the Himalayas and using giant turbines to blow moist air in from India?

"This plan reveals my very rich imagination," he once understated to me.

But no amount of imagination could save Mr. Mou on a cold January morning in 1999, when everything came crashing down.

One moment, he was being quietly chauffeured to work, his personal secretary -- and probable mistress -- beside him in the back seat. The next moment, all hell broke loose. Mr. Mou's car was swarmed by police, doors flung open and guns pointed at his head.

He has not had a breath of free air since. These days, the one-time hobnobber with China's leadership elite wears a blue-and-white-striped prison uniform with a number across the front.

His fall is a chilling example of the pitfalls faced by homegrown Chinese moguls who operated amid the legal and financial chaos of the country's rapid journey from Communist basket case to economic powerhouse.

Yang Bin, the so-called orchid king, who was the second-richest man in China in 2001, was sentenced to 18 years in jail last year on charges of illegal land use, bribery and fraud. Just before that, carmaker Yang Rong fled to the United States to escape pending economic charges.

These disgraced titans are the Chinese equivalents of Conrad Black or Martha Stewart, but in China there is always a good chance their downfall had more to do with politics than dodgy accounting.

"I have some sympathy for Mr. Mou and these guys," Beijing-based political economist Laurence Brahm says. "They are from that first generation of tycoons in China who went from rags to riches in a period of great change.

"It was like the Wild West in the United States. There were few rules, few guidelines. The guys who got rich . . . got rich in the grey areas."

Police refused for months to confirm that Mr. Mou was even in custody. When he finally went on trial, charged with defrauding a branch of the Bank of China of nearly $100-million in loans with phony letters of credit, he was given no chance to present evidence on his own behalf.

Indeed, because of China's weak disclosure laws, he barely knew what the case was against him. Everyone -- the court, the media and the public -- just assumed he was guilty. The showcase proceedings, attended by dozens of Chinese journalists, lasted one day. Seven months later, two weeks short of his 60th birthday, Mr. Mou was sent to jail for the rest of his life.

"If there's a lesson here, it's 'don't stick your neck out,' " Mr. Brahm said. "Mr. Mou became a little too flamboyant. People here like to see guys like him brought down."

Seeking news of Mr. Mou on a return visit to China, I found myself face to face with Xia Zongwei. A petite and prim 35-year-old in a shimmering, Chinese-style silk blouse, Ms. Xia was the woman in the car with Mr. Mou. She, too, was whisked away by the police, spending a year and a half behind bars before being released without charge.

Since then, she has dedicated her life to proving Mr. Mou's innocence.

As she sipped tea and talked in the morning quiet of a posh hotel bar, Ms. Xia clutched a thick bag of appeals, briefs and legal transcripts. She has no visible income, moving from place to place, relying on friends for food, clothing and a bit of money.

"Without the support of these people, I could not support myself," she said, her voice catching.

Once a month, she boards the bus for a 90-minute ride to Mr. Mou's prison outside the central Chinese city of Wuhan. They are allowed a half-hour, through glass, by telephone. Guards listen to every word. Sometimes they are allowed to share a meal. "But in fact, we don't eat much. We just talk."

Mr. Mou was married to Ms. Xia's sister, who divorced him, took their son to the United States and denounced his business practices in a 1996 letter to Chinese police.

Ms. Xia, who first got to know Mr. Mou as a babysitter, remains coy about their relationship and disputes claims that she was his mistress.

"It is not the usual love. It is more like respect and admiration for old people," she said. "I am his lawsuit agent, not his girlfriend. He is innocent. I want to try to have him released. . . . That would clear my name as well."

Mr. Mou has been stripped of his dignity, but clings to hope. He exercises every day by climbing stairs, she said, insists on cold showers, gorges on vitamins and takes regular medicine for his high blood pressure. He has lost 15 kilograms.

"He thinks he will start his career again, so he pays attention to his physical condition," Ms. Xia said. "But he is old. He has heart disease. He suffers in there."

He does not relate well to his three cellmates. "They committed crimes. They accept they will spend the rest of their lives there," Miss Xia explained. "But Mr. Mou does not. He is hopeful. That makes him different. And lonely."

The pair pin their fading hopes on new information uncovered from a related civil case. "It is easier to prove now that he didn't do it," Miss Xia said.

At the same time, there is the ongoing bewilderment of how this could have happened at all. "We believe Mr. Mou was targeted by conservative powers within the Communist Party who wanted to make him a leading scapegoat for capitalism," Miss Xia said.

"This case reflects the barriers on the road to economic reform, and Mr. Mou is a mirror of that reform. He reflects both China's achievements, and its mistakes. People know this case is wrong."

In fact, two of the judges who ruled against Mr. Mou are now in jail themselves -- sentenced last year to 13 and seven years, respectively, for taking bribes.

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