China sentences state-owned firm chief to death for graft

http://www.businesstimes.com.sg/government-economy/china-sentences-state-owned-firm-chief-to-death-for-graft

Posted by GOH Shu Qi, Year 3 undergrad at the School of Accountancy, Singapore Management University

Read this together with “Investors rush to cash in shares linked to Ling family” (Link) and “Relationship Networks and Earnings Informativeness: Evidence from Corruption Cases” (Link).

China sentences state-owned firm chief to death for graft

11 Dec11:51 AM

[BEIJING] China has sentenced the head of a state-owned company to death for corruption involving nearly 400 million yuan (S$84.9 million), state media reported, in a rare instance of an official being condemned to die.Communist Party authorities have waged a much-publicised anti-graft campaign since Xi Jinping ascended to the organisation’s leadership two years ago, with the powerful former security czar Zhou Yongkang being the highest-ranking official ensnared.

But while China executes more people than the rest of the world combined, according to rights groups, it is very rare for corrupt officials to face the ultimate penalty.

A court in the southern city of Guangzhou convicted Zhang Xinhua, former general manager of the Baiyun Industrial and Agricultural Corporation, of bribery and embezzlement on Wednesday, the Xinhua news agency said, citing the verdict.

Zhang was found to have embezzled company assets worth more than 280 million yuan since 2003, it said.

He also took bribes worth around 95 million yuan in exchange for various favours, according to the report.

Zhang’s conviction came on the same day that Liu Tienan, deputy director of the National Development and Reform Commission, China’s top economic planning agency, was sentenced to life in prison for graft.

Liu ranked far above Zhang in the country’s hierarchy, but his conviction involved 35.58 million yuan – less than 10 per cent of what Zhang was found to have obtained.

The last Chinese official to be executed for graft was Xu Maiyong, the former vice mayor of the wealthy eastern city of Hangzhou, who was put to death in 2011 after being convicted of taking bribes reportedly worth 198 million yuan, embezzlement and abuse of power.

The current anti-graft campaign has netted high-level “tigers” as well as low-level “flies”, but critics say the ruling party has failed to introduce systemic reforms to prevent corruption, such as public disclosure of assets.

Xinhua said that Zhang appealed on Wednesday after the verdict was announced.

“The corruption of people like Zhang Xinhua caused significant losses to the country… and challenged the public’s basic moral principles,” the report quoted Zheng Yunzhan, a judge of the court, as saying.

“We must firmly punish with severity crimes by people who take advantage of their official posts, that are vile in nature and cause great harm,” Mr Zheng said, according to the report.

AFP

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