China fires official in oil giant corruption probe

(AP)

The head of the commission that oversees China’s major state-owned companies was fired Tuesday in a spreading corruption investigation that appears to be an effort by the country’s new leaders to tighten control over government industries.

The Communist Party dismissed Jiang Jiemin from his positions as director and deputy party chief of the Cabinet’s commission that runs state companies, the official Xinhua News Agency said Tuesday, two days after officials announced an investigation into Jiang.

Jiang formerly was chairman of the state-run China National Petroleum Corp., which has been the target of a sweeping graft investigation that also has netted four top executives in recent days. They include three executives at CNPC’s listed subsidiary PetroChina.

As a full member of the party’s Central Committee, which is made up of its top 200 members, Jiang is the most senior official to fall since new leader Xi Jinping took power in November. Xi has made fighting widespread graft a key campaign of his leadership so far, with promises to target both junior and high-level officials.

The probe suggests that Xi and Premier Li Keqiang are making a stab at tackling the powerful state-owned industries and their allies who reformers say have hamstrung the government.

“The state conglomerates, they are empires unto themselves. They have too much money and too much power,” said Willy Lam, an expert on party politics at the Chinese University of Hong Kong. “This could be a signal that the Xi Jinping and Li Keqiang leadership is finally trying to discipline them and keep a tighter rein over the conglomerates.”

A prominent Chinese newspaper, the 21st Century Business Herald, cited unidentified “insiders” Tuesday as saying Jiang had been close to now-disgraced politician Bo Xilai. Bo, whose downfall was triggered by a scandal involving his wife’s murder of a British businessman, stood trial for corruption and abuse of power late last month.

The newspaper said when Jiang was at CNPC, he built oil refineries in places where Bo held leadership positions, including Liaoning province and the megacity of Chongqing, to enhance Bo’s “political performance.” Calls to CNPC’s spokesman’s office rang unanswered.

Also Tuesday, some state media outlets including the People’s Daily reported that Zhang Shuguang, the former head of the transport bureau at what was then the Railways Ministry, has been charged with accepting more than 47 million yuan ($7.6 million) in bribes between 2000 and 2011.

Unconfirmed news reports also earlier said China’s leaders have taken the unusual step of endorsing a corruption investigation into Zhou Yongkang, a former security czar and CNPC general manager with a power base in the oil industry.

The probe into China’s oil giant also has extended to one of the energy industry’s richest self-made entrepreneurs, Hua Bangsong, chairman of Shanghai-based Wison Engineering Services Co., which is a PetroChina supplier.

Wison said that Hua was “assisting the relevant authorities” in their investigations.

The company, which provides engineering and construction services to the oil industry, said its board of directors “is convinced that factual circumstances will be clarified.”

Wison tried to distance itself from PetroChina, a major customer, after recent news reports on their business relationship. It said PetroChina’s first-half contract revenue was insignificant.

Wison “operates legally and completed the necessary compliance check” required to list its shares on the Hong Kong stock exchange, the company said in a statement to the exchange posted late Monday.

Hua, who founded Wison in 1997, is worth $1.2 billion, according to Forbes.

(Copyright 2013 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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