On February 11, 2018, the Jiujiang Intermediate People's Court in Jiangxi Province resumed the second trial of the tax evasion case involving Gongqingcheng Sailong Company. The company’s legal representative appeared in court on behalf of Dai Xiaoquan, the defendant. After over an hour of proceedings, the judge announced that both Gongqingcheng Sailong and Dai Xiaoquan were acquitted and released immediately.
A photo captioned “Small Rights Acquitted – Future Aspirations to Enter the AI Industry†accompanied the article, showing a moment from the courtroom.
In October 2017, a media analyst published an article titled “The Founder Was Bizarrely Arrested: The Mystery Behind Shenzhen Sailong’s Sudden Demise.†This piece explored the journey of a tech entrepreneur who faced pressure from local officials, leading to accusations of misappropriating company assets and management control. It also analyzed the initial court ruling that found Sailong and Dai Xiaoquan guilty of tax evasion.
The article detailed the transformation of Gongqingcheng Sailong from a well-known tech enterprise to a controversial case, highlighting the challenges faced by private enterprises and tech entrepreneurs in the region.
On January 24, 2017, the Gongqingcheng Procuratorate charged Sailong and Dai Xiaoquan with tax evasion of 3.39 million yuan. During the first trial, the main issues under dispute were whether the tax evasion was valid, the nature of hidden taxes, and whether the company qualified as an export business.
On January 17, 2015, Dai Xiaoquan was taken into custody by Gongqingcheng police in Shenzhen, accused of tax evasion. According to an investment agreement between Sailong and the Gongqingcheng government, top executives were exempt from personal income tax for two years, making his arrest questionable. After being detained, he was not formally prosecuted but instead placed under house arrest without any legal procedures.
Since February 2014, Dai Xiaoquan had been illegally detained. In April of that year, he was forced to sign an equity transfer agreement before being released. In January 2015, he was arrested again on suspicion of personal tax evasion and later transferred to surveillance.
Despite no evidence of tax evasion, Dai Xiaoquan remained under personal restrictions for three years. During this time, Sailong also faced numerous legal and business challenges.
After the acquittal, Dai Xiaoquan expressed deep emotion, saying, “It’s truly done according to the law.†He shared his gratitude to the media and the judicial system for their fair treatment.
The Jiangxi provincial government took the case seriously, and during the investigation, although complex, the second-instance court did not interfere negatively. All decisions were based on facts and evidence.
During the recent trial, the prosecution and defense still debated the tax credit issue. A tax expert from the National Tax Import and Export Office of Jiangxi Province was invited to explain the situation. He stated that the government had not yet refunded the 120 million yuan owed to the company, which should be considered part of the tax calculation. This helped lay the foundation for the acquittal.
Following the media article, some rumors emerged, suggesting the case was due to gang disputes or asset transfers. However, investigations revealed these claims were unfounded. The person accused of being involved denied any ties to organized crime and claimed he was merely following instructions from former officials.
Dai Xiaoquan’s property in Canada was purchased years ago, and he continues to pay the mortgage. His wife’s living expenses are supported by friends and family, refuting the rumors.
Gongqingcheng Sailong is expected to enter bankruptcy liquidation soon. Many ongoing civil lawsuits from the period when Dai Xiaoquan was restricted remain unresolved. His team will continue to handle them carefully.
Despite the long legal battle, Dai Xiaoquan remains hopeful about the future. He plans to re-enter the entrepreneurial world, focusing on artificial intelligence and mobile products. He aims to build an ODMS platform, integrate the industry chain, and collaborate with major brands like Huawei and Xiaomi.
His defense lawyer, Xie Min, praised the judicial process, noting that the courts in Jiangxi have shown respect for facts and proper application of the law. She described the outcome as a victory for justice and a step forward in judicial reform.
Zhu Jie, one of the early investors and founding partners, expressed optimism about the leadership team and the future of the company. He called it the best news of the year.
For Xie Min, this case marked the end of her legal career. After two years of effort, she felt satisfied with the final verdict. She emphasized that the judgment represented progress in the judicial system and set a positive example for society.
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