Former Chinese Mining Tycoon Gets Death Sentence

SHANGHAI–A Chinese court Friday sentenced to death mining tycoon Liu Han on charges he headed a murderous criminal gang, a verdict that illustrates the seriousness of an anticorruption shake-up that has taken down dozens of government and business personalities.The 48-year-old entrepreneur built his Sichuan Hanlong Group into one of the largest private enterprises in southwestern China. But he did it as the boss of a mafia-like organization that operated like a violent “big bully” using kidnapping and murder to upset economic and social order, according to the decision handed down Friday by the Xianning People’s Intermediate Court in Hubei province.In what Chinese officials described as the nation’s biggest organized crime case in years, Mr. Liu stood trial last month along with 35 other defendants accused of gangland activities. The court ruled all of them guilty and sentenced five to die, including a younger brother of Mr. Liu named Liu Wei. Nine others received suspended death sentences, meaning the sentence could be commuted to life in prison. Others received jail sentences ranging between three to 20 years.

Several defendants were ordered to forfeit assets, including the entirety of Mr. Liu’s fortune, estimated a few years ago by Shanghai wealth-tracking service Hurun Report at $1 billion. Hanlong itself was fined 300 million yuan ($48 million) for forgery and fraud. The company couldn’t immediately be reached for comment.

In an extended broadcast Friday, China Central Television showed trial highlights that included prosecutor accusations of how the gang was organized and the violence it used, backed up by exhibits of weapons and witness testimony. Mr. Liu was shown questioning a former business partner who became a prosecution witness, and at one point trembled as he expressed sorrow to his family and even a readiness to die. “I have responsibilities,” he said.

“The group made tremendous financial gains through organized crime and became an economic force to be reckoned with,” the official Xinhua news agency said a few days before the verdict was announced.

Defense lawyers weren’t immediately available for comment.

In court, Mr. Liu himself described a fast-and-rough lifestyle that included luxury living and aggressive business tactics, according to a transcript of his comments. But he strongly denied involvement in criminal activity, alleging facts were manufactured for political reasons that he didn’t specify.

Death sentences are automatically appealed in China and occasionally commuted to life in prison.

The entrepreneur was arrested in early 2013 as Chinese antigraft investigators swooped into his home province of Sichuan and detained scores of Communist Party representatives, government officials and other business chiefs. The actions, centered in the Sichuan capital of Chengdu, appeared to kick off an antigraft campaign spearheaded by China’s then-new leader, President Xi Jinping.

Mr. Liu was immediately accused by authorities of criminal activity, but most of the others were held with little word from investigators about their alleged misdeeds. None are known to have faced trial.

Mr. Liu and the others appeared to share a key characteristic: links to retired politician Zhou Yongkang, who led the Communist Party in Sichuan before he was promoted to senior national positions that included command of China’s vast policing system. The jailings in Sichuan, as well as of members of Mr. Zhou’s family and a clutch of his former colleagues from China’s oil industry, suggested to analysts that Mr. Zhou’s network was being dismantled.

Now retired, 71-year-old Mr. Zhou, who can’t be reached, hasn’t been implicated in any wrongdoing.

“This corruption campaign has a depth and magnitude no one expected,” said Joerg Wuttke, a chemical industry executive and president of the European Union Chamber of Commerce in China. “If it is targeting a system, that would be most welcomed,” he said, but added it would be worrying if the campaign amounts to a politicized witch hunt.

The trial was anything but a normal criminal case, held in a court surrounded by police in a small city located hundreds of miles from where Mr. Liu was charged with conducting his activity. Xinhua reported his prosecution was handled “under the staunch leadership of the central committee of the Communist Party,” an indication it was approved by China’s senior leadership.

While on trial, Mr. Liu repeatedly protested the criminal accusations and suggested his arrest was politically motivated. “As a businessman I’m not against the Strike Black campaign,” he told prosecutors in reference to the broader corruption investigation, according to the statement reviewed by The Wall Street Journal. But he told the court, “Your job is to investigate a case, not manufacture a crime.”

With a fortune he says he built trading commodities, Mr. Liu diversified Hanlong into public works such as power stations. About five years ago, it began acquiring overseas mining businesses. When he was arrested, Hanlong ranked as the largest private enterprise in populous Sichuan, according to Xinhua.

During his defense, Mr. Liu described Hanlong as a legal enterprise that paid taxes, made charitable contributions and did deals that helped the nation. He described the origin of some investments as deals struck with government officials that in part helped fulfill political goals in Sichuan, at a time when the province was run by Mr. Zhou.

Now, much of Mr. Liu’s enterprise is in limbo. The tycoon’s arrest rippled through his overseas network of investments in Australia, Africa and the U.S. His downfall torpedoed big deals that previously appeared to illustrate China’s growing international investment ambitions.

For instance, Mr. Liu’s arrest cast doubt on Hanlong’s ability to fulfill agreements to arrange and guarantee $790 million to build a giant molybdenum mine in the Nevada desert, and months later the funding plan was officially abandoned. Even so, Hanlong remains the largest single shareholder in the mine owner, Colorado-based General Moly Inc., with a 13% stake.

In regulatory filings, General Moly, whose stock has fallen more than 75% since early 2013, says it continues to seek financing alternatives. The company didn’t respond to questions about Mr. Liu.

Write to James T. Areddy at james.areddy@wsj.com