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Entrepreneur Formally Arrested by Chinese Police on Corruption Charges - 2002-11-27

Chinese police have formally arrested the entrepreneur chosen to head a special economic zone in North Korea.

China's state run news service, Xinhua says Yang Bin is accused of running fraudulent investment schemes, promoting bogus contracts, offering bribes, and illegally occupying farm land.

He previously admitted owing more than $1 million in back taxes.

Mr. Yang has been under house arrest in the northeastern Chinese city of Shenyang since October while police investigated his activities.

Mr. Yang rose from poor beginnings to become China's second richest businessman by recognizing opportunities in the orchid breeding business and branching out into land development.

Shortly before his detention began, North Korea named him to head a project Pyongyang hoped would jumpstart its stagnant economy with methods similar to those used to spark China's roaring economic growth.

But Pyongyang named him to head the Sinuiju Special Autonomous Region without first consulting China. That prompted speculation the action angered Chinese officials.

But China's Foreign Ministry has said Mr. Yang's legal problems stemmed from his actions in China, not his appointment to head the special economic zone.

Over the past couple of weeks, work on the Sinuiju zone appears to have stopped. In Hong Kong, police raided the headquarters of Mr. Yang's company, Euro-Asia Agricultural Holdings, and its shares have been suspended from trading on the Hong Kong stock exchange.