A tycoon who became China's most wanted man has gone on trial for bribery and smuggling, after a decade-long extradition battle led to his repatriation from Canada last year.

Lai Changxing, who fled from China in 1999, is accused of heading the country's largest smuggling ring: a $10bn (£6.3bn) network that brought in everything from cigarettes and TVs to tanker loads of oil, thanks to hefty bribes to hundreds of officials.

State news agency Xinhua said the court in Xiamen, a southern coastal city, was trying Lai for "masterminding a criminal ring engaged in smuggling and bribery", which reportedly cost the country $3.6bn in unpaid tax. Six hundred people were investigated in connection with the case and 300 punished, according to Xinhua. At least two of those – the former chief of the Xiamen branch of the Commercial and Industrial Bank and former section chief of the city's customs bureau – were executed, while 11 were given suspended death sentences or jailed for life. Many believed Lai's connections went far higher.

But some in Xiamen compared Lai, 53, to Robin Hood for his generosity to many in his home town. He was said to have been a lavish tipper who even bought equipment for local police.

Barely educated, Lai started his first business at 20, when capitalism was in its infancy in China. At the height of his fortune he blew money on a football team and built a replica of the Forbidden City in Xiamen as a tourist attraction and movie set. Infamously, Lai also constructed the city's Red Mansion – named in homage to a classic Chinese novel – where he is said to have plied officials with alcohol and prostitutes.

He was arrested when the-then Chinese premier Zhu Rongji ordered an investigation into his Yuanhua group amid a wide-ranging anti-corruption campaign.

Zhu later said: "If Lai Changxing were executed three times over, it would not be too much." Lai and his family fled to Canada in 1999, where he sought asylum, saying the allegations were politically motivated and that he could face torture or execution if he returned home.

Canada repatriated him after Beijing guaranteed he would not be sentenced to death.

The Canadian embassy has said diplomats have had regular access to him and were present at the trial.

But widespread concerns about whether Lai could receive a fair trial remained. When state media reported in December that he had confessed, his lawyer in Canada said that had "no credibility whatsoever".

Lai denied committing offences in interviews overseas, although he said he had avoided taxes by exploiting legal loopholes and added: "The whole system in China is corrupt. To get ahead, you have to become part of that system."

Xinhua said Lai's legal rights had been "fully safeguarded", with Lai and his lawyer having access to all files relating to the case.

"Representatives for the prosecution and defence participated in the trial.

Many citizens, officials and lawmakers, as well as some of Lai's family and friends, also attended the proceedings," it added.