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China tycoon charged with corruption

Yang speaks to reporters prior to his arrest
Yang speaks to reporters prior to his arrest

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BEIJING, China -- The Chinese-born governor of North Korea's new capitalist zone, and one of China's richest men, has been formally charged with bribery, fraud and other "commercial crimes," state-run media reports.

Yang Bin, a 39-year old orchid and property magnate who befriended North Korea's leaders, was put under house arrest in the northern Chinese city of Shenyang a month ago.

Yang, a Dutch citizen and reportedly China's second wealthiest man, hit the headlines when he was chosen to head North Korea's Shinuiju City economic enclave -- a region officials say is being created with the intention of allowing unfettered capitalism to lure international visitors.

The tycoon was apprehended by Chinese authorities shortly after North Korean leader Kim Jong Il appointed him to head the zone and investigated on suspicion of "involvement of various illegal activities."

On Wednesday, China's Xinhua news agency said Yang was charged with making fraudulent investment schemes and contracts, offering bribes and illegally occupying farm lands.

The reported charges made no reference to Yang's involvement in the special zone -- an as-yet unrealized vision of a capitalist enclave 300 kilometers (186 miles) from Pyongyang and near China's border.

But the coincidence has driven observers to speculate that Yang had angered Chinese authorities by approaching North Korea on his own.

The Chinese Foreign Ministry did not immediately respond to a question about the matter, according to Reuters news reports, while the North Korean embassy in Beijing said it was unaware of any developments in Yang's case.

Chinese officials have said that Yang's arrest had nothing to do with his North Korean appointment.

They also say that China is not against the creation of the economic region, which is on the China-North Korean border.

But some analysts have said the tycoon may have overstepped his mark by independently wrangling a position managing the special zone.

A day before his arrest, Yang said he was being asked by Shenyang's provincial tax bureau to pay 30 million yuan ($1.2 million) in outstanding taxes by October 12.

At that time, he said the situation is being worked out and not a big problem.

Yang has based his fortunes in a Hong Kong listed horticultural company called Euro-Asia Agriculture Holdings. The company's shares were suspended earlier this fall after a slump on the markets.

-- CNN correspondent Lisa Rose Weaver contributed to this report

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