Chapter 69 The Most Surprising Indictment

No one expected that the subsequent handling of the Tieben incident would become a very difficult matter. At the very beginning, the outside world believed that the Tieben project was so easily supported by the local government, and it must be another example of a combination of government and business. However, with the deepening of the investigation, there has been no sign of corruption.In addition to steel, Dai Guofang, who is very grassroots, seems to have no understanding of human relations and politics. It is also difficult to argue that the Tieben project is a low-level redundant construction.Wu Xichun, former Minister of Metallurgy and President of China Iron and Steel Association, believes very positively: "Tieben is not a low-level redundant construction, and the problem of Tieben is not a technical problem." Director of Hejun Entrepreneurship Research Consulting Company, who has inspected the Tieben project many times Director Li Su told the reporter: "At that time, the Tieben project was proved to be the 'best steel mill in China' from the perspective of steel technology, and the input and output were very reasonable. Even if other steel mills had problems, it could make money." In the Jianlong project After the news of the resurrection appeared in the newspapers, a reporter from the Economic Observer interviewed Li Xinchuang, vice president of the Iron and Steel Planning Research Institute, and asked him to talk about his views on the handling of the Tieben incident. The expert who participated in drafting the national iron and steel industry policy said: " What was decided at the time was done, and now it is necessary to maintain the authority of the national macro-control policy.”

In late March 2006, after being detained for two years, Dai Guofang's trial was about to start. Hundreds of domestic media were moved by the news, and Business Weekly reporter Zhong Jiayong also went to Changzhou for an interview. He first went to the Tieben construction site by the Yangtze River.After Dai Guofang was arrested, thousands of workers on the construction site dispersed.In order to prevent the theft of supplies, the local government recruited nearly 50 security guards to take turns on duty, and the local Weicun Police Station also dispatched 10 police officers.It took the reporter more than 2 hours to walk around the construction site.What he saw was: wormwood growing wildly on the construction site, rusted steel, various faded construction materials and various equipment scattered everywhere, dilapidated and empty workshops, and a blast furnace for steelmaking that has already taken shape. and the basically built power stations were abandoned.In the past two years or so, no protective measures have been taken at the construction site, and everything has been exposed to wind and rain. Some of the equipment has depreciated, and some have been directly turned into scrap iron.According to the calculation of the local government's supervision team, the monthly loss reached more than 60 million yuan. Simply multiplying it by two years, more than 1 billion yuan has been lost.Dai Guofang's billions of dollars have been thrown away as easily as its master in prison.

The reporter also visited Dai's family in Dunan Village, Dong'an Town, Wujin District.At the entrance of the village, he met Dai Guofang's stepmother who had just returned home from pouring vegetables in the vegetable field. Dai's father had been speechless all year round, "he didn't talk to anyone at all."Dai's house is a small farmyard with a wide yard. To the east are two flat-roofed houses, and to the west are several low tile-roofed houses where sundries are piled up.Compared with the neighbor's house, this does not look like the hometown of a billionaire by any means.Next to the small courtyard is the Sanyou Roll Factory where Dai Guofang's "steel dream" started.At this time, it was already desolate and desolate.It is said that Dai Guofang's family property was only 80,000 yuan when it was seized. His three children were originally studying in Changzhou International School.

On March 28, the Tieben case was heard in Changzhou Intermediate People's Court.The Supreme People's Court, the Higher People's Court of Jiangsu Province, and the People's Procuratorate of Jiangsu Province all sent representatives to observe the case, while Tieben was defended by 17 well-known lawyers, with as many as 290 case files. However, the public indictment of the Changzhou People's Procuratorate surprised all the media present.Dai Guofang and others were charged with only one crime: the crime of falsely issuing tax deductible invoices.The procuratorate alleges that during the three years from 2001 to 2003, Iron and Steel Company used methods such as making false weighing sheets and storage sheets for scrap iron and steel shavings, as well as purchase code sheets for Dong’an processing plant, and through Li Jianhua and Ji Chunmei, respectively let Wujin supplies Recycling Co., Ltd., Wujin Yanghu Metal Recycling Company, Changzhou Shipbreaking Company, Changzhou Metal Recycling and Renewable Resources Co., Ltd., Changzhou Renewable Resources Wholesale Center Co., Ltd. (all dealt with separately), falsely issued 2,373 sales invoices for scrap steel and iron filings for Tieben , the amount exceeded 1.6 billion yuan, and the tax deduction was 160 million yuan.

In this indictment, none of the "five crimes" committed by Tie Ben two years ago were charged. Both the prosecution and the defense also had a heated debate on the charge of the crime of falsely issuing tax deductible invoices to Tieben.The most powerful accusation evidence presented by the procuratorate is the self-examination report submitted by Dai Guofang in order to "spend money to eliminate disasters". The defense lawyer believes that the domestic scrap iron recycling industry has a very special background: since May 1, 2001, in order to encourage the recycling of resources and turn waste into treasure, the state has implemented a tax-free policy for the waste material recycling industry. You can go through the tax registration procedures and receive purchase certificates and ordinary invoices.According to the "Reply of the State Administration of Taxation on Taxation Issues Concerning Waste and Used Materials Recycling Business": "In view of the fact that this kind of operation method is determined by the current operating characteristics of the waste and used materials industry, and the waste and used materials business unit does charge when issuing special value-added tax invoices. Therefore, the issuance of special value-added tax invoices by waste and used materials business units does not violate relevant tax regulations and should not be characterized as false issuance.”

This regulatory approval has played a positive role in the standardization of the waste materials recycling industry, but since then, there have also been false purchase certificates and false purchases of waste materials in order to achieve tax exemption in the industry.A reporter said in the report: "This can also explain why there are such billing companies at the gates of major steel mills across the country." Tieben could not clarify that he did not have such behavior.However, Dai Guofang denied the amount proposed by the public prosecutor from a business perspective. He believed that Tieben’s total sales during 2001-2003 were only 2.9 billion yuan, and it was impossible to falsely sell so much steel scrap. Otherwise, “Tieben would not use iron ore. At the same time, due to the special reason in the industry that the scattered purchase points in the material recycling industry cannot issue invoices at all, Tieben needs to issue a collective weight list, and then find the material recycling head office to issue an input invoice; according to relevant regulations, if If you import scrap steel to the company, you can deduct 17% or 13% of the value-added tax, but only 10% is deducted for iron and steel. In fact, "instead of paying more taxes."

Obviously, Dai Guofang fell into an unexpected legal trap.The charges he faces are entirely different from those for which he was detained two years ago, but they could just as well leave him in the clear.A senior media person commented: "The reason for Tieben's prosecution is the unspoken rule that almost all enterprises in the steel industry 'comply with' to a certain extent—falsely issuing scrap invoices to obtain tax exemption. At this point In fact, assuming that Tieben does not follow this unspoken rule, the cost of Tieben will be higher than that of its peers, and once Tieben complies with the so-called industry regulations, "Although the law does not punish the public, the problem in China is that it can be selectively punished." The fact is that In this way, although Tieben is not the biggest beneficiary of the unspoken rules, and Tieben's tax rate has been proved to be higher than that of its peers in court, Tieben is the most 'unlucky'."

Zhou Qiren, a professor at Peking University, wrote a column after the announcement of the preliminary trial results of the Tieben case: My first reaction when I read the newspaper was, how did the Tieben case become a tax lawsuit?The iron and steel case that shocked the whole country two years ago was directly caused by the "illegal construction of a large iron and steel joint project".At that time, the National Development and Reform Commission and other nine ministries and commissions conducted a special inspection on Tieben, and found out that "this is a typical case of serious dereliction of duty and violation of regulations by local governments and relevant departments, and a major case of suspected violations of laws and crimes by enterprises."Among them, the local government was involved in illegal project establishment and illegal land granting, while Tiebang was suspected of "defrauding bank credit and loans by providing false financial statements, misappropriating bank working capital loans" and "a large number of tax evasion". "Fixed Asset Loan Approval and Cash Management Regulations".Subsequently, the State Administration of Taxation announced: "Three companies including Jiangsu Railway Company have been determined to have evaded 294 million yuan in taxes."Now, after Dai Guofang and others have been detained for two years, the public prosecution in the court is only "falsely issuing invoices and deducting 160 million yuan in taxes" - such a big change, what does it mean?

I think the most debatable thing is that people—especially local officials and private entrepreneurs—know that this time, Tieben did not "offend" because of tax deductions, but when it was his turn to "do it" , but charged in a tax-related case.Does the government really want to catch the tax case?Just catch it generally.Why is the behavior of "issuing tax invoices" in almost every steel mill, usually nothing to do, and others to do nothing, but in April 2004, it was discovered that it was on the iron head of a large-scale steel complex. A matter of life? Professor Zhou Qiren said thoughtfully in the article: "Looking back at history, Dai Guofang should be glad that our country is moving towards a country ruled by law."

History can be looked back, but Dai Guofang can never go back.For entrepreneurs, there are many successful endings, but there is always only one failure ending.Dai Guofang is imprisoned, Tie Ben dies, a dream of iron and steel turns into a dense mist without sorrow in the swaying misty rain in the south of the Yangtze River.