---
title: "Yili Official Website Names and Reports Former Chairman: 240 Million Yuan of Public Funds Misappropriated, Yet No Action for 14 Years!"
description: "On October 24, Yili Group published an open letter on its official website, naming and reporting its former chairman, Zheng Junhuai, for misappropriating 240 million yuan of public funds. The company claims that 78 volumes of case files, with conclusive evidence and confessions, have been shelved for 14 years, first at the Inner Mongolia People's Procuratorate's Anti-Corruption Bureau and now with the Inner Mongolia Supervision Commission, due to protection from powerful figures. Yili also alleges that Zheng's six-year sentence was illegally reduced by two and a half years, and that he was allowed to leave prison freely."
author: "New Distribution"
publisher: "New Distribution"
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published: "2018-10-24"
language: "en"
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---

# Yili Official Website Names and Reports Former Chairman: 240 Million Yuan of Public Funds Misappropriated, Yet No Action for 14 Years!

> On October 24, Yili Group published an open letter on its official website, naming and reporting its former chairman, Zheng Junhuai, for misappropriating 240 million yuan of public funds. The company claims that 78 volumes of case files, with conclusive evidence and confessions, have been shelved for 14 years, first at the Inner Mongolia People's Procuratorate's Anti-Corruption Bureau and now with the Inner Mongolia Supervision Commission, due to protection from powerful figures. Yili also alleges that Zheng's six-year sentence was illegally reduced by two and a half years, and that he was allowed to leave prison freely.

On October 24, Yili Group published an article on its official website titled "Yili Suffers Long-term Sabotage, Forced to Publicly Report: Urgent Request for Thorough Investigation of Zheng Junhuai and His Protectors." The article names and reports former chairman Zheng Junhuai, claiming that 78 volumes of case files documenting Zheng's misappropriation of 240 million yuan of public funds, with conclusive evidence and confessions, have been stored for 14 years at the Anti-Corruption Bureau of the Inner Mongolia Autonomous Region People's Procuratorate. After this year's institutional reform, they were transferred to the Inner Mongolia Supervision Commission, where they have been shielded and no prosecution has been initiated.

Yili claims that Zheng Junhuai's six-year prison sentence was artificially reduced by two and a half years on the pretext of "inventing a fake water-saving device patent" and "good behavior," and that during his actual imprisonment, he could stay in a hotel-like environment and return home at will.

Today, October 24, is also the day of the verdict in the "Yili Rumor Case."

**Timeline of the Yili Rumor Case:**

- 2018-03-26: An online article titled "Yili Chairman Pan Gang May Be Out of Contact" was widely reposted. Hohhot police received a report and immediately set up a special task force to investigate.
- 2018-03-28: Suspect Zou Moumou was arrested at his home in Beijing on March 28, 2018, and a large amount of evidence was found at his residence.
- 2018-04-03: On the evening of April 3, after further investigation by Hohhot police, another suspect, Liu Moumou, was arrested in Beijing on April 2, and a large amount of evidence was found at his home.
- 2018-05-07: After receiving written reports from Yili and Pan Gang himself, Hohhot public security organs conducted an investigation and arrested suspects Zou Guangxiang and Liu Chengkun on suspicion of picking quarrels and provoking trouble, and defamation. The procuratorate has approved their arrest.
- 2018-05-31: Media learned that at the 2017 annual shareholders' meeting of Yili Co., Ltd. held that day, Pan Gang appeared and spoke. Yili's stock once hit the daily limit up.
- 2018-10-24: The case of Zou Guangxiang and Liu Chengkun suspected of picking quarrels and provoking trouble was publicly sentenced in the First Court of Huimin District People's Court in Hohhot, Inner Mongolia. The court sentenced Zou Guangxiang to one year in prison with a one-year and six-month reprieve, and Liu Chengkun to eight months in prison. Both appealed in court.

On the same day, Yili Group published a report article on its official website and official Weibo, naming and reporting former chairman Zheng Junhuai.

Zheng Junhuai is currently the chairman of Heilongjiang Hongxing Group Food Co., Ltd., and is known as the "godfather of China's dairy industry." He is the former chairman of Inner Mongolia Yili Industrial Group Co., Ltd.

**The following is the original text from Yili Group's official website:**

**Yili Suffers Long-term Sabotage, Forced to Publicly Report**
**Urgent Request for Thorough Investigation of Zheng Junhuai and His Protectors**
**—An Open Letter on More Truths About the Rumor Case**

We truly do not want to hurt anyone or offend anyone. For many years, we have endured humiliation and focused on production and operation, but we have been repeatedly sabotaged by Zheng Junhuai and his protectors. For 14 years, we have been unable to obtain justice, and we are mentally and physically exhausted. Forced by circumstances, we now disclose the truth to the public...

Summary:
- Before the rumor case broke out in March this year, Zheng Junhuai secretly met with Liu Chengkun in Beijing, and the defamatory rumor article about Yili was immediately published;
- After failing to obtain huge illegal gains, the tactic of spreading rumors about Yili has been the same for over a decade;
- Former national leaders, several provincial and ministerial leaders, and bureau-level leaders have acted as Zheng Junhuai's protectors, artificially erasing Zheng's criminal facts involving hundreds of millions of yuan and operating a fake commutation;
- Zheng Junhuai's six-year sentence was artificially reduced by two and a half years on the pretext of "inventing a fake water-saving device patent" and "good behavior," and during his actual imprisonment, he could stay in a hotel-like environment and return home at will;
- The 78 volumes of case files documenting Zheng Junhuai's misappropriation of 240 million yuan of public funds, with conclusive evidence and confessions, have been stored for 14 years at the Anti-Corruption Bureau of the Inner Mongolia Autonomous Region People's Procuratorate. After this year's institutional reform, they were transferred to the Inner Mongolia Supervision Commission, where they have been shielded and no prosecution has been initiated;
- In 2015, Prosecutor General Ma Yongsheng, who had a sense of justice, retrieved the case files of Zheng Junhuai's misappropriation of 240 million yuan from the Anti-Corruption Bureau of the Inner Mongolia Procuratorate. It took only two hours to confirm that the evidence chain was complete and the criminal confessed, and prosecution could be initiated immediately. However, due to obstruction by Zheng's powerful protectors, no one dared to handle it for 14 years, and they falsely claimed it was "not yet closed";
- After the rumor case in March this year, Yili again submitted materials to the Supreme People's Procuratorate's Third Inspection Team, which was in Inner Mongolia, and judicial organs at all levels, detailing that Zheng Junhuai's confirmed misappropriation of 240 million yuan and many clues of major economic crimes had been left unhandled for 14 years and that he had been given a fake commutation. Half a year has passed with no substantive progress;
- Yesterday, Yili formally submitted the above materials to the Central Inspection Team in Inner Mongolia, hoping for a fair resolution for society.

Today, the case of Zou Guangxiang and Liu Chengkun suspected of picking quarrels and provoking trouble was publicly sentenced in the First Court of Huimin District People's Court in Hohhot, Inner Mongolia. The court sentenced Zou Guangxiang to one year in prison with a one-year and six-month reprieve, and Liu Chengkun to eight months in prison.

The five-day trial revealed the truth behind this rumor case and the key figure behind the scenes—Yili's former chairman, Zheng Junhuai. The methods used in this rumor case are identical to those used by the mastermind behind the scenes over the past decade to attack, defame, and sabotage Yili, even the tactic of "sending the writer to prison while escaping oneself" is similar.

It is sad that Liu Chengkun and Zou Guangxiang have been judged by law, while the mastermind remains at large and continues to sabotage and attack Yili, even using overseas anti-China websites to attack and smear China's dairy industry.

Facing repeated attacks, slander, and sabotage, we were reluctant to spend time and energy to respond, enduring again and again, always believing that innocence will prevail. We thought that responding would only fuel the rumors, so we focused on production and operation. But we underestimated Zheng Junhuai's disregard for bottom lines and his lack of restraint, and underestimated the radiation of whitewashing and the destructive power of rumors. The endless attacks and smears over the years have caused lasting and serious damage, especially at major sensitive moments such as annual report releases, with negative impacts far beyond what we can bear and control, and we have been misunderstood time and again.

Today, we no longer remain silent. We will disclose more truths about the rumor case to the public, so that the public can see what kind of person Zheng Junhuai really is, what powerful protectors are behind him, and how Zheng Junhuai and his protectors have sabotaged Yili...

**Who is behind the rumor case? Before the case, Zheng Junhuai secretly met with Liu Chengkun and provided relevant content**

After the rumor case against Yili broke out on March 24, 2018, public opinion surged, the stock market fluctuated, and Yili's market value evaporated by over 6 billion yuan that day, causing panic among employees, investors, and dairy farmers. Although Yili issued a clarification statement immediately, rumors always spread faster and wider than facts, and with malicious speculation emerging endlessly, the destructive power was far beyond what a corporate statement could stop. Yili chose to report the case to the police immediately.

Various signs indicated that Zheng Junhuai was involved in the rumor case, but he hurriedly distanced himself, having his lawyer issue a public statement and accept interviews, claiming he "did not know" Liu Chengkun and others and had "no contact." But what was the actual situation?

During the five-day public trial, evidence presented by the prosecution showed that Liu Chengkun confessed that before the case, Zheng Junhuai took the initiative to meet him at Jianwai SOHO in Beijing and provided him with relevant information for the rumor article. The prosecution also provided Liu Chengkun's chat records in court. These records showed that he told his partner Dong Min: "It can only be written as a novel, the information source is not true." Dong Min replied: "You can make a novel series, and write the difficult parts in a novelistic way... Expose the materials one by one, and if that doesn't work, use a novel format..."

Subsequently, Liu Chengkun made a grand announcement on his Moments: "Tonight I'm going to write a short story, super heavy, stay tuned." That night, he published the article defaming Yili and its management on his personal WeChat public account and sent the link to a financial journalist group with over 200 members, sparking discussions about Yili and its management.

Zou Guangxiang, who was also in the group, saw Liu's article and the group discussions, proactively added Liu Chengkun on WeChat, and asked for more details. Liu Chengkun revealed the rumor information to Zou in a positive tone and said, "Let's write together."

On March 26, Zou Guangxiang published false content about Yili and its management on his WeChat public account, which quickly spread online.

After the rumor article exploded online, Liu Chengkun's WeChat chat records, legally extracted by police during the trial, showed that he boasted to someone: "I stirred it up, awesome, it's already exploded."

Evidence presented by the prosecutor also showed that Liu Chengkun and Zheng Junhuai (WeChat name "Guanhuai") had WeChat chat records. After the rumor exploded online, Liu Chengkun reported to Zheng Junhuai, saying, "Give me more information so I can continue writing." Earlier, Liu Chengkun's articles praising Zheng Junhuai also revealed that he had met Zheng Junhuai multiple times, had been entertained by Zheng, and called him "Old Master"...

Even Zou Guangxiang, a co-defendant, said in court: "I didn't know the relationship between Liu Chengkun and Zheng Junhuai, and didn't know it was so complicated behind the scenes. If I had known, I wouldn't have followed up on this matter."

**Why does Zheng Junhuai repeatedly sabotage Yili? Incomplete handling of old cases and failure to obtain illegal assets**

In short, the process is as follows:

At that time, Zheng Junhuai and his protectors conspired to embezzle state assets, transferring a large amount of Yili assets in disguised forms; before they could be transferred to their names, the scheme was exposed, and Zheng Junhuai and others were arrested; the protectors then maneuvered to artificially erase Zheng's misappropriation of 240 million yuan and many clues of major economic crimes, instead choosing a smaller amount of 16.5 million yuan for a lighter sentence of six years; they also manipulated a fake commutation, reducing Zheng's sentence to three and a half years. Even during those three and a half years, Zheng could freely enter and exit prison like staying in a hotel and go home at will; after release, he sued the Hohhot municipal government to demand illegal assets, lost multiple times, and then pressured Yili to cooperate in transferring the illegally transferred assets to their names; because their actions were illegal, Yili resolutely refused... At that point, they began a frenzied campaign of retaliation, long-term rumors, defamation, and persecution against Yili and its management.

As is well known, in 2004, the scandal of then-chairman Zheng Junhuai and others illegally misappropriating public funds, buying national bonds causing huge losses, and family members holding huge company shares was exposed. Independent directors Yu Bowei, Wang Bin, and Guo Xiaochuan fulfilled their duties and questioned Zheng Junhuai and others. Instead of complying with listed company regulations, Zheng Junhuai, to cover up his crimes, forcibly convened an irregular board meeting to remove Yu Bowei. Independent director Wang Bin resigned in anger, triggering the "independent director storm" of that year.

According to the Beijing News, within days after the "independent director storm" broke out, relatives of senior executives, including Zheng Junhuai's daughter Zheng Haiyan, quickly transferred over 8.44 million shares (nearly 100 million yuan) of Yili held indirectly through Huashang Shishiji to several ordinary workers who had no ability to pay.

However, paper cannot wrap fire. Zheng Junhuai's illegal activities, including misappropriating huge public funds, were fully exposed after a two-month investigation by the China Securities Regulatory Commission. In December of that year, Zheng Junhuai and four other senior executives were criminally detained on suspicion of misappropriating huge public funds for personal profit. In 2007, Jia Qizhong, head of the investigation division of the Anti-Corruption and Bribery Bureau of the Inner Mongolia People's Procuratorate, which handled the case, told Xinhua News Agency reporters: "Given the large amount involved, the number of people, the wide geographical scope, and the complex fund flows, we divided into multiple teams and went to 14 provinces and cities including Beijing, Shanghai, Fujian, Guangdong, Hainan, Zhejiang, Anhui, Chongqing, Sichuan, Hunan, Hubei, Henan, Jilin, and Liaoning, investigating and questioning over 300 people and extracting over 100,000 pieces of evidence. After nearly five months of efforts by prosecutors, we quickly obtained and fixed the main and key evidence, forming 78 volumes of case files." Later, the Inner Mongolia Autonomous Region Procuratorate confirmed that the evidence chain was complete, the parties confessed, and prosecution could be initiated at any time for Zheng Junhuai's misappropriation of 240 million yuan of public funds.

This amount was enough to have Zheng Junhuai spend the rest of his life in prison at that time. However, under the manipulation of powerful protectors, Zheng's misappropriation of 240 million yuan and many clues of major economic crimes were artificially erased, and only a lesser charge was publicly tried, with a symbolic light sentence of six years.

At the time, some media questioned the verdict; this year, former independent director Wang Bin raised doubts again: "In terms of the amount, there is a certain discrepancy between the verdict and the responsibility he should have borne."

However, even this lenient six-year sentence was artificially reduced by two and a half years under the protectors' manipulation, and for the remaining three and a half years, Zheng Junhuai could leave prison at will like staying in a hotel.

It is precisely because the procuratorial organs did not thoroughly handle Zheng Junhuai's old case and shielded him, and because powerful protectors artificially erased Zheng's misappropriation of 240 million yuan and many clues of major economic crimes, and operated a fake commutation, that their arrogance was fueled, leaving endless troubles for Yili that persist to this day...

**What is Zheng Junhuai's real purpose? Demanding huge illegal economic benefits, even using a former deputy prosecutor general of the Supreme People's Procuratorate to pressure Yili**

Because Zheng Junhuai's crime was exposed suddenly in 2004, the huge illegal assets transferred out of the group had not yet been transferred to their names when he was arrested.

In 2008, as soon as his sentence ended, Zheng Junhuai sued Hohhot Investment Co., Ltd., which had cleaned up the mess, demanding illegal gains, but lost the case.

After losing the lawsuit against the Hohhot municipal government for illegal property, Zheng Junhuai and his protectors turned their attention to Yili: for over a decade, including some leaders of the Inner Mongolia Autonomous Region and their relatives, they have been pressuring Yili's management to cooperate in transferring the assets illegally transferred out before Zheng's arrest to their names.

Zheng Junhuai even used a former deputy prosecutor general of the Supreme People's Procuratorate to pressure Yili. In 2012, Xing Baoyu, then prosecutor general of the Inner Mongolia Autonomous Region People's Procuratorate, told Chairman Pan Gang: "A leader of the Supreme People's Procuratorate asked Yili to cooperate in helping transfer the assets illegally transferred out by Zheng Junhuai to their names"; in 2015, when Chairman Pan Gang reported to Prosecutor General Ma Yongsheng about Zheng Junhuai's sabotage of Yili and his major illegal activities, Ma also said that a former deputy prosecutor general of the Supreme People's Procuratorate (the aforementioned "leader") had made the same request to him.

Facing repeated pressure, Yili's management was miserable but always adhered to the legal bottom line, resolutely refusing to do anything illegal.

**How does Zheng Junhuai sabotage Yili? Whitewashing himself vs. defaming Yili's management**

After losing lawsuits against Hohhot Investment Co., Ltd. multiple times and failing to obtain illegal property through pressure, out of revenge, Zheng Junhuai began to gather a group of writers and online thugs. On one hand, he hyped himself as a "victim"; on the other hand, he launched personal attacks, defamation, and persecution against Yili's management, using every possible means, including defaming management, bribing individual judicial personnel to illegally obtain information about management and their families, and then fabricating rumors to spread, and hyping black articles at sensitive moments like annual report releases...

Rumors can destroy a person. Over a decade of repeated hype not only whitewashed Zheng Junhuai's crimes but also made rumors almost replace the truth. Two major rumor cases directly caused stock crashes.

One was in February 2011, when Zheng Junhuai's so-called "assistant" Zhang Sanlin fabricated rumors attacking Yili and its management, with the participation of unscrupulous media person Li Xiaoxiao and ex-convict Jiang Lin, causing Yili's stock to hit the daily limit down that day; the other was in March 2018, when Liu Chengkun and others were used to fabricate another rumor case, causing Yili's market value to evaporate by over 6 billion yuan that day. The tactics were almost the same, except that the previous one fermented on forums, while this one relied on self-media.

Facing rumors and sabotage, Yili quickly issued clarification announcements, but announcements alone could not stop the spread of rumors. To protect shareholders' interests, Yili quickly took measures that any listed company would take—reporting the case to the police according to law.

However, sadly, we not only had to bear the huge damage caused by the rumor case but also endure repeated slander and abuse from those with ulterior motives. Yili and its management were unwilling to get involved in unnecessary disputes, enduring Zheng Junhuai's dirty water time and again, focusing on making the enterprise bigger and stronger. But due to the repeated hype and clamor by Zheng Junhuai and his online thugs, we were hurt and misunderstood again and again.

Birds of a feather flock together. What is the truth? Look at the thugs who serve as Zheng Junhuai's "vanguards":

- Zhang Sanlin, a retired employee of the Inner Mongolia Autonomous Region Federation of Trade Unions, was bought by Zheng Junhuai with a large sum of money; in September 2004, during the sensitive period when Zheng was under investigation, fearing discovery, Zheng gave Zhang Sanlin 269,800 yuan under the guise of publicity fees to buy a Ford Mondeo. After the 2011 rumor case, he fled (attached are the vouchers for Zheng's payment to Zhang Sanlin under the guise of publicity fees and Zhang's car purchase receipts);
- Li Xiaoxiao, whose unit received a total of 900,000 yuan in sponsorship fees from Zheng Junhuai from 2002 to 2010, which were stopped after being discovered by Yili Group's audit in 2010. Shortly after, the rumor case against Yili and its management, fabricated by Zhang Sanlin, Li Xiaoxiao, and hired Jiang Lin, occurred (attached is the contract signed between Zheng Junhuai and Li Xiaoxiao);
- Jiang Lin, who was disciplined by the Chongqing Juvenile Delinquent Correctional Institution for theft, and in 1999 was sentenced to seven years in prison for robbery by the Chongqing Jiulongpo District People's Court;
- Liu Chengkun, a person expelled by the media, who in court, in front of his wife, argued that "having sex with someone" and "chatting with prostitutes" were work needs, and had been dealt with by the Beijing Public Security Bureau, leaving a criminal record...

Regardless of the purposes of Li Xiaoxiao, Liu Chengkun, and others, and whether there are commercial interests behind them, looking at the case itself, from investigation to prosecution to trial to verdict, the judiciary has its own conclusion, and we believe in the fairness and justice of the law.

**What is the truth about Yili's management? They took over in a critical time and led the company to grow, but have been slandered for a long time**

Among the many rumors and self-promotion hype fabricated by Zheng Junhuai, the most influential is his hype of his own contributions and defamation of Yili's management. What are the facts?

Reviewing reports on the "independent director storm" and "Zheng Junhuai's detention" from that year, it is not difficult to find the answer:

Looking back at the turn of the century, China's dairy industry faced both opportunities and challenges. In those turbulent times, dairy people with ideals, youthful passion, and enthusiasm were eager to seize this rare opportunity to achieve corporate development and promote industry progress.

In 1999, Pan Gang led a group of young dairy people to establish Yili's liquid milk division from scratch. With the pioneering and enterprising spirit of youth, they achieved a leap in business revenue from 60 million yuan to 4.6 billion yuan in just four years, ushering in China's liquid milk era.

However, just as Yili was ushering in a great development opportunity, President Pan Gang, who was responsible for production and operation, led such a team that was wholeheartedly striving for Yili and repeatedly achieving outstanding results, but inexplicably encountered suppression from then-chairman Zheng Junhuai.

It was only after the case was exposed that we learned that Zheng Junhuai's mind was not, as he claimed, focused on Yili's long-term development or on making China's dairy industry bigger and stronger. Instead, he was focused on maximizing personal interests through his power.

To this end, Zheng Junhuai disregarded national laws and the consequences of huge losses. He used 1.5 million yuan of company funds as a bribe to buy off Ge Zheng, chairman of Zhejiang Jinxin Trust, to help him carry out a series of illegal asset transfers: Zheng misappropriated over 600 million yuan of company funds to buy national bonds through Zhejiang Jintong Securities under Jinxin Trust, then mortgaged the bonds to cash out, transferred the cash to Shenzhen Yinxin Investment, which then transferred it to Zhejiang Jinxin Trust, which then paid the Hohhot Finance Bureau, which held Yili shares, to buy all of the Finance Bureau's state-owned shares in Yili, thereby illegally turning Yili assets into private property... When his illegal activities caught the attention of the Shanghai Stock Exchange and were about to be exposed, Zheng used illegal means such as personal investigations to try to force board members to collude with him. When that failed, he forcibly removed independent directors and isolated and attacked other directors who upheld justice...

In the end, Zheng Junhuai's crimes were exposed. Not only were he and several former managers arrested, but it also directly pushed the rapidly developing Yili to the brink of collapse: employees were panicked, not knowing the company's future; competitors were eyeing Yili, ready to push it out of China's dairy industry; the stock hit the daily limit down, market rumors were rampant, and investor confidence was lost... At this critical moment of life and death, then-President Pan Gang and the management took over in a critical time, turned the tide, and led the company out of difficulties and onto the right track.

In the 14 years since, under the leadership of management and the hard work of all employees, Yili has grown steadily and rapidly, with revenue breaking through 10 billion yuan, then 20 billion, 40 billion, 50 billion, 60 billion, and reaching 68 billion in 2017; from a small northern factory to the number one dairy company in Asia, entering the global dairy first tier...

It is not easy to build a strong enterprise, and it is even harder to focus on the real economy for over a decade. It is even more difficult to choose an industry like dairy, which has a long industrial chain and is "small" and "scattered." There is no shortcut to success; it relies on the down-to-earth, pragmatic, and hard work of all Yili people, with management even working year-round without rest...

However, even under such hard-won circumstances, Yili still has to face Zheng Junhuai's long-term attacks, slander, and sabotage. As the company grows and strides toward internationalization, the attacks have intensified, with persecution, defamation, and sabotage becoming more frenzied. They even did not spare the chairman when he collapsed from long-term high-intensity work and needed treatment, letting the rumors last for months, which is truly outrageous...

**Who is indulging and shielding Zheng Junhuai? Zheng's protectors include former national leaders and several provincial, ministerial, and bureau-level leaders**

Zheng Junhuai's misappropriation of 240 million yuan and other illegal activities have conclusive evidence and case files; Zheng was given a fake commutation, reducing his sentence from six years to three and a half; after release, Zheng was also accused of embezzling nearly 200 million yuan of state assets in Heilongjiang...

Such a criminal has been at large for years, on one hand long-term defaming, smearing, and sabotaging Yili, and on the other hand packaging himself in the media, hypocritically saying he "would not do anything to harm Yili."

Facing Zheng Junhuai's over-a-decade of sabotage, defamation, and attacks, we were forced and had no choice but to submit dozens of reports to procuratorial and supervisory organs at all levels, detailing that Zheng's confirmed misappropriation of 240 million yuan and many clues of major economic crimes had been left unhandled for 14 years and that he had been given a fake commutation. We urgently request that the confirmed illegal activities of Zheng Junhuai be prosecuted immediately, that Zheng be brought to justice, and that the truth be disclosed to the public to stop his sabotage of Yili.

But whenever relevant departments wanted to handle the case, they were pressured and obstructed by Zheng's powerful protectors. How powerful are Zheng's protectors? The public can perceive through two incidents:

In 2011, after Zhang Sanlin fabricated the Yili rumor case, we went to the leaders of the Inner Mongolia Autonomous Region Procuratorate to appeal: Zheng Junhuai has committed such serious crimes, and you have confirmed his misappropriation of 240 million yuan. Why haven't you prosecuted? Why do you let such a criminal continue to persecute Yili and cause it so much suffering?

The procuratorate leaders expressed understanding and sympathy for our plight, but told us: "The case of Zheng Junhuai's misappropriation of 240 million yuan has been confirmed, but it cannot be prosecuted because it was assigned by a certain leader. However, you can provide other clues of Zheng's illegal activities, and we will investigate."

We knew that the procuratorate also had other clues of Zheng's crimes. After Zheng was arrested, Liu Bo, a former Yili employee, proactively approached the procuratorate and Yili Group to report: he had disappeared for a period, but in fact he had been in Shanghai helping Zheng manage huge illegal assets, including many companies such as Hohhot Hengxin Co., Ltd., Hohhot Chengxin Co., Ltd., Shanghai Yangguan Industrial Co., Ltd., Shanghai Lijie Green Food Co., Ltd., Shanghai Lichi Co., Ltd., Hong Kong Zhuocheng Co., Ltd., Shanghai Yingzhou Industrial Co., Ltd., as well as real estate and cars; and the Wuhai Traditional Chinese Medicine Factory, which was acquired in the name of Yili Group at the time, was actually signed by Zheng Junhuai and the Wuhai Party Secretary at the Inner Mongolia New City Hotel, but in fact it was acquired by Zheng through his illegally controlled Shanghai company, and it was not under Yili's name at all.

So we told the procuratorate leaders that Zheng has so many criminal clues, can we start investigating from these clues? The leaders said "we will arrange it immediately." Soon, the Inner Mongolia Procuratorate established a special case team led by Chen Mou, a police officer from the Anti-Corruption Bureau. During the investigation, the team discovered many clues of Zheng's illegal activities and verified that Liu Bo's confession was true. But strangely, after the team reported the interim results to the Anti-Corruption Bureau leaders, the case was dropped, and the team was quickly disbanded. Since then, no one dared to investigate these clues.

In 2015, when Zheng Junhuai again sabotaged Yili, we reported to the Inner Mongolia Autonomous Region People's Procuratorate and Prosecutor General Ma Yongsheng the fact that the procuratorate had confirmed Zheng's misappropriation of 240 million yuan but had shielded him and not prosecuted, as well as many clues of Zheng's major economic crimes.

The day before, near the end of the workday, we reported to Prosecutor General Ma. He said he had been transferred from Shandong to the Inner Mongolia Procuratorate and was not familiar with the case, and asked us to wait with confidence. He told us: according to the regulations on reporting work of the People's Procuratorate, real-name reports will be replied to, and the procuratorate will act according to law and implement the real-name report from Yili in a timely manner. The next morning around 11 o'clock, Prosecutor General Ma replied to us: he had the head of the prosecution division retrieve all case files of Zheng's illegal activities from the Anti-Corruption Bureau, and it took only two hours to verify that the facts of Zheng's misappropriation of 240 million yuan reported by Yili were accurate and that prosecution could be initiated immediately. We also learned that Prosecutor General Ma handed the matter to Qu Yunqing, then executive deputy prosecutor general of the Inner Mongolia Procuratorate, for implementation. However, immediately after, they faced enormous pressure from Zheng's powerful protectors. Until January 2018, when this righteous and responsible Prosecutor General Ma left office, the case was not handled, and prosecution of Zheng's illegal activities was not initiated.

This shows how powerful the protectors behind Zheng are. How powerful are the protectors behind Zheng Junhuai?

In the process of Zheng Junhuai's illegal activities and fake commutation, the protectors who shielded him involved former national leaders, several provincial and ministerial leaders, and several bureau-level leaders, as well as the former chairman of a well-known enterprise in Inner Mongolia.

Under the protection of these powerful protectors, Zheng Junhuai did whatever he wanted and carried out long-term persecution of Yili's current management. Until March this year, he again fabricated rumors, and even around the trial of this rumor case, he continued to hype attacks. We had to again report to the Supreme People's Procuratorate's Third Inspection Team, which was inspecting Inner Mongolia, and supervisory and procuratorial departments at all levels, and personally report to the leaders of these units about Zheng's confirmed misappropriation of 240 million yuan and many clues of major economic crimes that had been left unhandled for 14 years and the fake commutation. After receiving the materials, the leaders of the Third Inspection Team and the Inner Mongolia supervisory and procuratorial departments expressed sympathy and understanding for Yili's plight, and they also believed that what we reported was true and objective. But half a year has passed, and no action has been taken on the many cases involving Zheng's major illegal activities. During this process, we kept asking, and the answers we received were as follows:

First, it is true. But the new Criminal Procedure Law is currently being submitted to the National People's Congress for review, so we need to wait a bit longer;
Second, due to institutional reform, the responsibilities of supervisory and procuratorial departments are still unclear. The case files have been transferred to the Inner Mongolia Supervision Commission, which should retrieve the files to initiate the process, and only then can the procuratorate prosecute;
Third, the case is under preliminary verification and implementation;
Fourth, Zheng Junhuai's case has never been closed;
Fifth, not investigating Zheng is to protect your company. If you continue to report, we will investigate you as well...

Prosecutor General Ma Yongsheng took only two hours to confirm that Zheng's misappropriation of 240 million yuan was objective, the evidence chain was complete, and the criminal confessed, and prosecution could be initiated immediately. How is it that today Zheng's case is "still under verification"?

Now some people, to continue covering up and shielding Zheng's illegal activities, deliberately confuse the public by saying that Zheng's case "has not been closed." The case of Zheng's illegal activities investigated by Chen Mou and the case of Zheng's misappropriation of 240 million yuan are two separate cases. It was Chen's case that was artificially stopped and not continued, while the facts of Zheng's misappropriation of 240 million yuan have long been clarified, the evidence chain is conclusive, and prosecution can be initiated immediately. How can it be said that the case "has not been closed"?

Is it because of the revision of the Criminal Procedure Law and institutional reform that some departments have stopped working and become inactive? Is it that during the law revision process, criminals are allowed to commit crimes without being held accountable? Is it that the mastermind behind the rumor case is allowed to attack an enterprise that involves the interests of hundreds of thousands of people upstream and downstream? Is it that criminals are allowed to remain at large for a long time?

As for the claim that "not investigating is to protect the company," it is absurd! Over the past decade, whenever someone asked about these matters, some people would turn things upside down and say: "This is an internal struggle within the company; they all have problems. Not investigating is to protect Yili's current management." In fact, these statements are meant to confuse the public, with the aim of shielding Zheng Junhuai and covering up their own dereliction of duty. If you really want to protect the company, how can you allow the criminal Zheng Junhuai to persecute Yili for a long time, causing such huge losses to the country, society, and the company, without caring?

It is clear how powerful Zheng Junhuai's protectors are! After artificially erasing Zheng's illegal activities for 14 years, even today, the procuratorial departments still do not dare to offend them and do not dare to prosecute Zheng for his misappropriation of 240 million yuan.

**When will fairness be restored to Yili? Urgent request to prosecute Zheng for the 240 million yuan crime, thoroughly investigate the fake commutation and embezzlement of Heilongjiang state assets, and stop the sabotage of Yili**

Since the 18th National Congress of the Communist Party of China, under the guidance of General Secretary Xi Jinping's efforts to comprehensively strengthen party discipline and govern the country according to law, party organizations at all levels have taken practical actions to fulfill their oath of loyalty to the party. All parts of the country are seriously implementing the requirements of "there must be laws to follow, laws must be strictly enforced, and violations must be prosecuted."

We also truly feel that the procuratorial departments at all levels are under enormous pressure, and we fully understand.

But the lenient sentence for Zheng Junhuai did not make him repent for his actions, let alone be grateful. Instead, he repaid kindness with enmity, suing the government for illegal property. When that failed, he long-term defamed, persecuted, and attacked Yili and its management, even using illegal means to target the elderly and children in management's homes, spreading rumors everywhere and causing trouble. Every rumor has the most direct impact on the stock market, often causing the stock to hit the daily limit down, leading investors to watch their wealth evaporate overnight; causing panic among Yili employees and worry among their families; causing serious losses to dairy farmers, with their hard-earned savings going down the drain...

Looking at the global dairy industry, no dairy company has suffered such huge damage and pressure from outside operations as Yili has for so long; looking at any domestic entity enterprise, no company has been shackled by the old case of a former leader to this day... Yet Yili, over the past decade, has achieved the number one position in Asia's dairy industry despite the sabotage by Zheng Junhuai and his protectors. Only Yili people know the hardships and pressures involved... But when facing the sighs of relatives, the confusion of employees, the helplessness of dairy farmers, and the disappointment of investors, and facing the fatal blow of rumors at every major corporate milestone, especially on the road to internationalization today, our previous forbearance collapses instantly, leaving us no choice but to retreat.

We are well aware that issuing this open letter today may touch the interests of more people, not only inviting more frenzied attacks from Zheng Junhuai and his protectors but also possibly retaliation from those officials who have been inactive for 14 years or even suspected of dereliction of duty and shielding. We truly do not want to hurt anyone, but after so many years, we have no way out. We have no choice but to disclose to the public the truth about Zheng Junhuai's confirmed misappropriation of 240 million yuan and many clues of major economic crimes that have been left unhandled for 14 years, the fake commutation, and the long-term sabotage of Yili by Zheng and his protectors. We again urge the procuratorial organs to immediately prosecute Zheng Junhuai for his many major illegal activities, to stop the sabotage of Yili by Zheng and his protectors.

"Guang'an Secretary Yan" and "Taizhou Director Zhou" were reported and within less than a week, the relevant departments confirmed and publicly announced the investigation results based on clues from the internet. Prosecutor General Ma Yongsheng took less than two hours to confirm that Zheng's misappropriation of 240 million yuan was objective, the evidence chain was complete, and the criminal confessed, and prosecution could be initiated immediately. Now it has been delayed for 14 years, and more than half a year has passed since our real-name report after the rumor case in March. These case files have already been transferred from the Anti-Corruption Bureau of the Inner Mongolia Procuratorate to the Inner Mongolia Supervision Commission this year. There is no need to re-investigate as in the cases of "Secretary Yan" and "Director Zhou"; they have already been confirmed and can be prosecuted immediately. But until today, no one has handled them, and they even use "not closed" to fob off the company and the public.

Just when we felt desperate, the Central Inspection Team once again entered Inner Mongolia, which rekindled our hope. We immediately reported in person to the Central Eighth Inspection Team and formally submitted real-name report materials. We look forward to an explanation to the company and society. Today, we select three of the dozens of materials we have submitted to various departments for real-name reporting and disclose them to the public. We will also disclose more specific information to the public depending on the progress of handling Zheng Junhuai's long-term sabotage of Yili and his illegal activities...

We reiterate the following facts:

- The 78 volumes of case files, which have been confirmed, with complete evidence chains and confessions, documenting Zheng Junhuai's misappropriation of 240 million yuan and many clues of major economic crimes, have been stored for 14 years at the Anti-Corruption Bureau of the Inner Mongolia Autonomous Region People's Procuratorate. Now these files have been transferred to the Inner Mongolia Supervision Commission. We urge the procuratorial organs to disclose these 78 volumes to the public and prosecute Zheng Junhuai's illegal activities according to law;
- The facts of Zheng Junhuai's misappropriation of 240 million yuan and many clues of major economic crimes were artificially erased under the manipulation of powerful protectors and were not prosecuted according to law. We urge the procuratorial organs to disclose who manipulated and erased Zheng's crimes. Prosecutor Ma, who had a sense of justice and responsibility, confirmed the case in less than two hours and said prosecution could be initiated immediately. Why do you still falsely claim to the public that the case is not closed? If it is truly not closed, what have you been doing for these 14 years? We believe what Prosecutor General Ma Yongsheng said is true; we also believe that Jia Qizhong, head of the investigation division of the Anti-Corruption and Bribery Bureau of the Inner Mongolia Procuratorate, when representing the procuratorate in an interview with Xinhua News Agency, said that the 78 volumes of case files were formed and are true;
- Under the operation of powerful protectors, in 2005, only the lesser charge of misappropriating 16.5 million yuan was publicly tried, and Zheng Junhuai was symbolically given a lenient sentence of six years in prison, which was then reduced to three and a half years. Even during those three and a half years, Zheng could freely enter and exit prison like staying in a hotel. No wonder he himself said at a dinner party entertaining Liu Chengkun and others involved in the rumor case, "The leaders asked me to rest for a while, so I went in to rest" (attached is the chat content mentioned in Liu Chengkun's article published on January 30, 2018, about accepting Zheng's dinner invitation). We urge the procuratorial organs to disclose which leaders participated in the lenient sentencing and fake commutation of Zheng's case? How was the fake commutation operated? Who allowed Zheng Junhuai to freely enter and exit prison like staying in a hotel? The Shanxi gang leader was re-imprisoned due to fake commutation. The procuratorate clearly knows the facts of Zheng's fake commutation. Why has he not been re-imprisoned today?
- In addition, among Zheng Junhuai's many major economic crimes, one involves the suspected embezzlement of 200 million yuan of state assets in Heilongjiang. We sent dozens of real-name report materials to the Heilongjiang Provincial Supervision Commission regarding this suspected illegal activity and confirmed receipt, but after half a year, no one has given any response. We urge the Heilongjiang Provincial Supervision Commission to disclose the entire process and relevant documents of the acquisition of Sandaomu Farm by companies controlled by Zheng Junhuai. Were there forged contracts by Zheng's controlled companies? Was there a public bidding, auction, or listing for the restructuring of Sandaomu Farm? Did any leader manipulate the process? Did it cause the loss of nearly 200 million yuan of state assets as complained by Sandaomu Farm employees?

...

We also solemnly tell Zheng Junhuai and his protectors: as long as you are not capable of destroying the documents controlling Sandaomu Farm, and not capable of burning, bombing, or destroying the office building where Zheng's case files are stored along with the 78 volumes, there will come a day when your cases will be handled, your illegal activities will be punished according to law, and your sabotage of Yili will be exposed. We firmly believe that justice may be delayed, but it will never be absent!

We have always walked in the sunshine, and the situations we have reported are objective and true. We are willing to bear all legal responsibility for this. We once again urge the relevant departments to uphold justice, and call on the public to pay attention, thoroughly investigate Zheng Junhuai's many illegal activities, promptly prosecute the confirmed illegal activities of Zheng Junhuai, and disclose the truth to the public, so as to completely stop the sabotage of Yili by Zheng Junhuai and his protectors, restore a normal business environment for the enterprise, bring peace to the dairy farmers, and restore fairness and justice to society! We believe that under the central government's strong anti-corruption campaign and the inspection sword of the Central Inspection Team, the day when sunshine dispels the haze will come soon.

Inner Mongolia Yili Industrial Group Co., Ltd.
October 24, 2018

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