80 officials entangled in bank loan swindle
Eighty government officials involved in a bank loan swindle involving billions of yuan have received severe punishment in Foshan, a city in South China's Guangdong Province, according to reports Sunday.
Colluding with bank and government officials, Feng Mingchang, a private entrepreneur in Nanhai District of Foshan, defrauded the Industrial and Commercial Bank of China (ICBC) of billions of yuan, a report from the National Audit Office said.
After an investigation that lasted more than a year, investigators discovered more than 233 people involved in the case, including 80 government officials, Xinhua reported.
The corrupt officials have been expelled from their posts and 29 were arrested and are awaiting trials, including Ye Jiasheng, former deputy governor of ICBC Guangdong branch, Lin Junjiang, former governor of ICBC Foshan branch, Lin Yuhang, former governor of ICBC Nanhai district branch and Sun Bokuan, former director of Nanhai District Finance Bureau.
Feng, owner of Huaguang Decorative Boards -- a building material manufacturer, forged financial papers and conspired with bank executives to obtain 7.4 billion yuan (US$894 million) from the Nanhai branch of the Industrial and Commercial Bank of China, according to a National Audit Office report provided to the National People's Congress in June of last year.
Much of the money was then illegally transferred overseas. More than 2 billion yuan (US$ 233 million) has not been recovered, according to the report.
Dozens of bank and government officials allegedly took bribes from Feng and forged false letters of credit and proof of land and property to help him receive bank loans.
In his heyday in late 1990s, Feng was a star entrepreneur in Foshan and he owned what locals say was the biggest manufacturer of decorative wooden boards in Asia.
He often socialized with top city leaders, who on various public occasions praised Feng's company as a flagship in the local private sector.
However, Feng's fortunes took a drastic turn for the worse in August 2003 when the central government began investigating his company after a report submitted by the National Audit Office.
Feng has been arrested and is waiting for trial.
Feng is just a typical example of the mode of collusion between corrupt government officials and business owners.
According to the National Audit Office report in June last year, 41 ministries and commissions appropriated as much as 1.4 billion yuan (US$171 million) dedicated to special projects to build residential and office buildings for their own use.
The auditing report also showed how Chen Zhongyi, former director of Anshan Power Industry Bureau in Northeast China's Liaoning Province, loaned 370 million yuan (US$44.7 million) to a private business without authorization.