Archive for ‘corruption’

26/08/2014

Top India court says coal allocations were illegal – Businessweek

India’s Supreme Court said Monday that all government allocations of coal reserves to private companies from 1993 to 2010 were conducted illegally, and it will hold a hearing to decide whether to cancel them.

More than 200 coal blocks, or areas of unmined reserves, were allocated during that period to companies for their use in power plants or steel or cement factories. The companies were allowed to sell excess coal on the open market, but the court said commercial sales from the reserves must be suspended until it makes its decision at a hearing on Sept. 1.

The court’s ruling extends beyond the initial case — dubbed “Coalgate” by the Indian media — in which the previous Congress party-led government was accused of costing the treasury hundreds of billions of dollars by selling or allocating about 155 coal blocks in 2004-09 without competitive bidding. A report by the country’s Comptroller and Auditor General leaked to the media in March 2012 estimated those losses to have been around $210 billion.

The scandal along with other high-profile cases of alleged corruption were seen as a key reason for the Congress party’s loss in this year’s elections to Prime Minister Narendra Modi‘s pro-business Bharatiya Janata Party.

The court said in its ruling Monday that between 1993 and 2010 there had been “no fair and transparent procedure” in the coal allocation process, “resulting in unfair distribution of the national wealth.”

“Common good and public interest have, thus, suffered heavily,” said the court, led by Chief Justice R.M. Lodha.

via Top India court says coal allocations were illegal – Businessweek.

21/08/2014

Cognac Makers Are Feeling the Hangover from China’s Corruption Crackdown – China Real Time Report – WSJ

Worldwide sales of cognac dipped in 2013 after several years of heady increases, according to new industry data. The culprit? China’s ongoing battle on corruption.

The Bureau National Interprofessionnel du Cognac (BNIC), the main industry group for the fortified wine from southwestern France, said earlier this week that sales of the drink slipped 6.7% by volume and 10.2% by value during the 12-month period ending July 2014. Exports to the Far East region, which includes Southeast Asia, China and Japan, fell by about one-fifth in the past year in both volume and value, the BNIC reported.

The industry group said the loss in the Far East region was directly related to a slowdown in the Chinese market, which was a large consumer of the more expensive bottles of the famed French eau de vie. China’s ongoing crackdown on corruption and excessive spending by government officials and state-owned company employees has cribbed spending on lavish entertaining – one reason some economists are predicting as much as a 1.5% dip in GDP growth this year.

The weak sales results are a stark contrast from two years ago, when China was the promised land for cognac makers. Sales hit a record high in 2012 in China when the country was knocking back the special brandy, clinking glasses at banquets and karaoke bars alike. Regarded as a status drink, many Chinese imbibers often sprung for the most expensive bottles and exchanged them as gifts. The world’s most expensive bottle was auctioned in Shanghai in 2011.

But the party has crashed. Owners of major cognac brands, such as Remy Cointreau SARCO.FR -0.74% (which owns Remy Martin cognac), reported a sobering 30% decline in sales during the last quarter of 2013.

Cognac is hardly the lone liquor getting caught in the corruption crackdown. Sales of baijiu, China’s notoriously fiery grain alcohol, and whisky are down, too.

China’s largest wine importer, ASC Fine Wines, said its sales stalled in 2013 as the anti-graft campaign drastically reduced sales of the most expensive bottles. Earlier this week, the company told the Journal it has since slashed the average price of its wines by 32% in a bid “to stimulate more demand for these wines through more attractive pricing.”

The Chinese are still drinking, they insist, just not splurging.

via Cognac Makers Are Feeling the Hangover from China’s Corruption Crackdown – China Real Time Report – WSJ.

13/08/2014

China Names U.S. as the Top Destination for ‘Economic Fugitives’ – Businessweek

China’s wealthy elite is fleeing the country for a better quality of life—better education, better air, and greater personal security. China’s Ministry of Public Security has just added a further potential reason: fleeing the police.

“The U.S. has become the top destination for Chinese [economic] fugitives,” Liao Jinrong, a ministry official told state-run China Daily on Monday. According to the English-language newspaper, “More than 150 economic fugitives from China, most of whom are corrupt officials or face allegations of corruption, remain at large in the United States.”

While this is a rather incredible admission, the intent of the article—no doubt placed by China’s propaganda authorities—seems to be to make the case for an extradition treaty between the U.S. and China. “We face practical difficulties in getting fugitives who fled to the US back to face trial due to the lack of an extradition treaty and the complex and lengthy legal procedures,” Liao told the paper.

via China Names U.S. as the Top Destination for ‘Economic Fugitives’ – Businessweek.

28/07/2014

Beijing gets tough on party officials who go private | The Times

China’s intensifying anti-corruption campaign has turned its guns on the people who link government and business, forcing nearly 230 senior Communist party officials to quit the company directorships they hold on the side.

China’s president Xi Jinping

The draconian orders, which have also affected tens of thousands of more junior officials moonlighting for corporate China, are said to have unleashed a mass “exodus” of independent directors from listed Chinese companies in recent months.

The government has promised there will be more to come. China’s state news agency warned that the authorities were planning another “detailed directive” that analysts believe would attempt to tighten further the restrictions on the roles officials can play in the private sector.

The rules are expected to crack down on the activities of retired officials: as the rules stand, they are able to take on company directorships if those positions do not relate to their former specialities as civil servants.

Sources believe that the new directives will broaden the terms of the ban in a way that could affect foreign companies in the mining, energy, banking and pharmaceutical sectors.

The same burst of anti-corruption propaganda also invited the public to “blow the whistle on violations”.

The crackdown began last autumn with a ban on senior government and party officials from working for outside companies. Although a few resignations followed that ban, the real purge did not begin until scores of listed companies were subjected to an inspection a few months later.

That inspection, according to Chinese state media, identified 229 officials at the ministerial or provincial level who were working for outside companies and 40,700 junior officials with a source of company income outside their civil servant salaries.

About 300 Chinese companies listed on the Shanghai and Shenzhen stock exchanges have apparently been affected by the shakedown, losing the officials they specifically hired to build relationships with Beijing and bring the companies closer to the government.

The central role of those relationships within Chinese business has been laid bare over the past two years as details have emerged of the fabulous wealth amassed by the families of senior officials.

Also exposed has been the extent to which western companies operating in China have been convinced that their success can only be guaranteed by hiring either former officials or people with exceptionally strong personal links to the central and provincial governments.

via Beijing gets tough on party officials who go private | The Times.

21/07/2014

To No End: Why China’s Corruption Crackdown Won’t Be Stopping Soon – China Real Time Report – WSJ

One major question hovering over China’s anti-corruption campaign – already the longest the country has ever seen — is when it’s going to wind down.

According to anti-corruption czar Wang Qishan, who briefed fellow officials on the campaign last week (in Chinese), it won’t be any time soon.

And the major reason for that may well be that Beijing hasn’t yet figured out how to end it.

Wang laid out the anti-corruption strategy in unusual detail during these meetings, supplying a road map that outlined where the campaign had been and where it’s now headed (in Chinese).

Beijing’s anti-graft crusade isn’t just a one-off initiative, but an extended battle which began last year, taking down, as President Xi promised, both high-ranking “tigers” and lower-level “flies.”

And it’s accelerating.  According to an analysis that appeared on the website of the People’s Daily earlier this month, from January to May this year, Wang’s inspection teams disciplined 62,953 people, an increase of 34.7% over the same period the previous year (in Chinese).

In his briefing last week, Wang conceded that the campaign didn’t start all that well.  Indeed, in the early stages of the campaign, Wang said, the sense among his inspection teams was that corruption was buried so deep within China’s political marrow that it couldn’t be defeated, only deterred from growing.  Party officials were only too comfortable with political business as usual, where bribes and personal connections overrode considerations of actual talent when it came to selecting and promoting cadres.

“Some localities and departments, as well as some party organizations saw the pursuit of honest government as not their main responsibility,” Wang said, adding that the only option at that point was to “not allow corrupt elements to gain a foothold” in the few institutions where corruption was not already omnipresent.

The tide turned, he said, when cadres were finally given political cover by Beijing to report on their comrades engaging in corruption, especially those selling access to government officials and offering bribes for promotion.  That routine had become worrisome to Beijing because unqualified and immoral officials were becoming policy-makers.

Moreover, Wang argued, by focusing on specific areas known to be rife with graft—such as land development and real estate projects, mining rights, and public welfare funds—inspectors showed skeptics and potential targets that this campaign was a serious effort to rollback misconduct.

So what’s next?

That’s the tricky part.  Punishing corruption is one thing; preventing its reemergence could be a far-greater problem.  As one Chinese analyst admitted despondently in the pages of the People’s Daily (in Chinese), unless the system is thoroughly reformed, there’s a good chance that “the rot will come back.”

Continuing to press hard against corruption seems to make sense if Beijing’s expanding fight against graft is finally starting to show success and developing the party’s legitimacy as a problem-solver on issues that matter to the masses. But there’s also concern about just how much longer the campaign can be maintained when, as the analysis above notes, there is “a danger of overdoing something, leaving some people in a constant state of anxiety.”

Fear is evidently freezing some officials from becoming more actively engaged in supporting Xi’s call for changes in how the government operates—a passivity that has led to complaints in the Party media (in Chinese).

And there’s a greater danger:  That this effort to tear down corruption is simply dealing with the existing problems and not doing anything about building a new way of decision-making.

As a leading Chinese commentator on the current leadership’s policies put it in the same People’s Daily essay, the real need is “to create a good political environment, allowing officials to devote oneself, heart and soul, to do things, and not focus on the small circle of relationships one has with one’s superiors, doing always what one is told to do.”

That’s an attractive vision, but one that would require a major restructuring of politics in China.

via To No End: Why China’s Corruption Crackdown Won’t Be Stopping Soon – China Real Time Report – WSJ.

17/07/2014

Ex-Mongolia party officer gets life imprisonment for taking millions in bribes | South China Morning Post

A mainland regional official was sentenced to life imprisonment today for bribe-taking, a court said, the first high-ranking bureaucrat to be jailed in the corruption crackdown overseen by President Xi Jinping.

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Wang Suyi, 53, was last year removed from his post as chief of the Communist party’s United Front Work Department in the northern region of Inner Mongolia, an agency that liaises between the ruling organisation and non-communist groups.

He was convicted of bribery and sentenced to life in prison by the First Intermediate People’s Court of Beijing, the court said on its official account on Weibo.

He was charged with taking more than 10.73 million yuan (HK$13.5 million) in bribes between 2005 and last year in exchange for securing business deals for companies and promotions for individuals, earlier local media reports said.

Wang was the first official to face criminal trial among the 40 of vice-ministerial or higher rank investigated since China’s once-in-a-decade power transition in 2012 that anointed Xi as chief of the ruling Communist Party, according to the reports.

The South China Morning Post previously quoted a senior editor with a regional party newspaper as saying that Wang’s mistresses accused him of taking 100 million yuan in bribes, and of nepotism involving about 30 relatives.

Xi took office as president last year and has vowed to root out corrupt officials, warning that graft could destroy the ruling party.

Corruption causes widespread public anger in China and the drive has been widely touted.

At least 10 mainland provinces have launched investigations to track down so-called “naked officials”, those whose relatives have moved abroad, and the party is increasingly punishing members on charges of “adultery”, as it tries to clean up cadres’ reputation for corruption and womanising.

But critics say no systemic reforms have been introduced to combat it, while citizen activists calling for such measures have been jailed on public order offences.

via Ex-Mongolia party officer gets life imprisonment for taking millions in bribes | South China Morning Post.

08/07/2014

China’s Communist Party Reminds Colleges: Keep it Clean – China Real Time Report – WSJ

The chiefs of some of China’s most prestigious universities last week reported to their version of the principal’s office: the Communist Party’s Central Commission for Discipline Inspection.

The party-appointed heads of 26 top Chinese colleges and universities were reminded at a meeting last week of their obligations to run honest institutions, according to the commission. The commission, which acts as the internal party watchdog, said the officials signed a clean-governance pledge before the Ministry of Education’s top official, Yuan Guiren, and that several more will do so later this month.

The reminder follows corruption probes by party officials into China’s energy business and the military, where suspicion of corrupt acts has landed numerous officials in detention. Last week, the party booted a former top general from its ranks ahead of prosecution, which analysts described as the most significant takedown since Chinese President Xi Jinping became the party leader in late 2012.

The university sector is getting treated with kid gloves by comparison, based on Tuesday’s statement.

Global corruption watchdog Transparency International alleges universities in many nations are hotbeds for corruption simply because the institutions typically absorb so much of the public purse. In China, it isn’t unusual for government inspectors and the party to remove selected university administrators on allegations of corruption – including bribery related to attending them — but one critic has recently told The Wall Street Journal that such moves represent only the tip of the iceberg.

A separate report this week from China’s party watchdog said that Shanghai’s Fudan University runs business activity that could lead to malfeasance. The school’s party secretary, Zhu Zhiwen, pledged to rectify the problems to avoid possible corruption, according to a summary of the findings published on the school’s website.

Fudan illustrates the challenge. With modest beginnings 109 years ago as a public school that would invite students to seize the dawn – as the Chinese characters of its name denote – Fudan has blossomed into a sprawling institution with over 30,000 students, multiple campuses and 11 affiliated hospitals.

Fudan’s business, the party commission said, exhibited cases of chaotic spending of scientific research funds, mismanaged infrastructure development and poor supervision of school-owned companies during its study earlier this year.

To consider their clean-up challenges, the university’s party administrators are being asked to stand in the corner.

via China’s Communist Party Reminds Colleges: Keep it Clean – China Real Time Report – WSJ.

30/06/2014

China’s Communist Party expels former military chief Xu Caihou in graft probe | South China Morning Post

A former top Chinese military figure was expelled from the Communist Party for suspected corruption and his case handed over to prosecutors for investigation, the Politburo announced after a meeting on Monday.

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The party also decided to expel three cadres closely connected to the nation’s former security tsar, Zhou Yongkang, over allegations of corruption and bribery, Xinhua reported.

A report on the investigation into Xu Caihou, a former vice-chairman of the powerful Central Military Commission, was presented at the Politburo meeting presided over by party General Secretary and President Xi Jinping, Xinhua reported. The case was handed over to military prosecutors, it reported.

The 71-year-old Xu, who was until 2012 a member of the Politburo, would be the most senior military figure to go on trial for corruption.

“His case is serious and leaves a vile impact,” Xinhua cited a Politburo statement as saying.

The investigation into Xu, launched on March 15, found he had abused his power and received bribes “personally and through his family members” in exchange for granting promotions in the military.

Xu had also sought profits for other people in exchange for cash and properties, which were routed through his family members, Xinhua reported.

The South China Morning Post reported on March 20 that an escort of dozens of armed police had taken Xu from his bed at the 301 Military Hospital in Beijing.

via China’s Communist Party expels former military chief Xu Caihou in graft probe | South China Morning Post.

26/06/2014

Two major generals detained as graft probes widen in Sichuan | South China Morning Post

Two Chinese major generals that have connections with Sichuan have been detained for a graft investigation, according to two separate sources.

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Both People’s Liberation Army officers were taken into custody in May, the sources close to the military said.

One of those held was retired Ye Wanyong, a former commissar of the Sichuan military region. Ye, in his 60s, was removed yesterday from his position as a member of the Chinese People’s Political Consultative Conference (CPPCC), the nation’s top political advisory body. But the reason was not specified by the CPPCC.

Ye’s house was searched by the authorities, according to the sources.

The other, Wei Jin, 55, is a vice-commissar of the Tibet military region, a post he was promoted to in 2011. He has held senior military posts in the southwest province of Sichuan, including as senior army propaganda officer in Chengdu, the province’s capital.

The latest investigation into Ye and Wei is also believed to be part of the wider anti-corruption campaign in the PLA. President Xi Jinping, who also leads the military as chairman of the Central Military Commission (CMC), has repeatedly vowed to clean up the beleaguered military.

Ye left the military in January after reaching the retirement age of 60. He has served in the Sichuan military region since 2006.

His early military career started in Tibet, Sichuan’s neighbour in the west, but most of the time Ye served in liaison offices in Sichuan.

via Two major generals detained as graft probes widen in Sichuan | South China Morning Post.

11/06/2014

China targets officials who sent families abroad

China’s anti-graft campaign is now targeting officials who have sent their spouses and children abroad, where they can create channels to potentially funnel illicit gains and establish footholds for eventual escape from the mainland.

Nearly 900, mostly mid-level, government officials in the southern province of Guangdong have been demoted or forced to resign or retire early after being identified as having spouses or offspring with permanent residency or citizenship abroad while they themselves continue to work on the mainland. Because they remain without their families, they are known colloquially as “naked officials” – a term popular with the public because of its mocking tone. It is the first time a provincial government has taken action against them. The move signals a new approach in President Xi Jinping‘s anti-corruption campaign that takes aim at a phenomenon in Chinese politics that has hindered the Communist Party’s efforts to curb the flight of crooked officials and their ill-gotten assets. “The perception among the Chinese public is that these officials use their positions for their personal gains, then they send their families away and when the time comes, they are going to bail,” said Dali Yang, a China expert at the University of Chicago. Guangdong authorities said they found more than 1,000 such officials, among whom about a fifth had promised to try to get their families to return to China.

Though it’s up for debate, the general definition of “naked officials” excludes officials whose children are only studying abroad but not holding foreign residency or passports – allowing the sons and daughters of top leaders to pursue expensive college degrees at top overseas universities.

via China targets officials who sent families abroad.

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