Wronged former tycoon vies for payout

Guangdong provincial prosecutors are reviewing former tycoon Lan Shili's application for State compensation after he was wrongly accused of fraud and dragged through the court, his lawyer told China Daily on Thursday.

The founder of tourism company East Star Group, who previously served a jail sentence for tax evasion in 2010, has applied for 500,000 yuan ($68,700) in compensation for mistakes that were made in the handling of the case made against him.

Lan applied for compensation back in December 2021, after the Guangzhou Intermediate People's Court declared him not guilty of fraud due to a lack of evidence over a contract dispute in 2016.

The Guangzhou People's Procuratorate informed Lan of its decision to review the application for compensation on Monday, Lan's lawyer Sun Jianzhang told China Daily.

"Lan's compensation application mainly covers his custody, residential surveillance, arrest and criminal detention made wrongly by the prosecutors in the case, as well as his mental anguish for the wrongful decisions," Sun said.

The troubled businessman also asked for a public apology to restore his reputation, and that the police officers and prosecutors be held accountable for their mistakes in handling the case, "but so far we haven't yet received feedback from the procuratorate on this part", he added.

Lan, 63, a native of Hubei province, founded East Star Group in the 1990s and rose to become the richest person in Hubei province in 2005, according to Forbes magazine. The same year, he launched East Star Airlines, but the airline went bankrupt in 2009.

In March 2015, Lan signed an agreement with brothers Li Yong, Li Meng and Li Gang, the controllers of a dairy processing company listed on the Shenzhen Stock Exchange in Guangdong, planning to cooperate in an acquisition of Orient Thai Airlines.

However, the two parties squabbled over contract terms on the acquisition payment and equity transfer. In February 2016, the Li brothers reported Lan to the Guangzhou police, and a few days later, the Guangzhou Public Security Bureau filed a case to investigate Lan.

On March 3, 2016, Lan was detained on suspicion of contract fraud, and a month later was placed under residential surveillance. On July 9 that year, he was found to have escaped and fled the country.

Over three years later, on Nov 9, 2019, Lan was captured in Singapore and returned to Guangzhou.

On Dec 20, 2021, the intermediate court found Lan not guilty, and released him the same day.

Lan was once a high-profile entrepreneur in China. Before the contract dispute, he was sentenced to four years in prison for tax evasion in April 2010. He was released early in August 2013 because of illness, according to a report by Global Times.