China Resources chairman fired in graft scandal
Monday, April 21, 2014 at 11:08AM
Richard L. Cassin in Aiao Shibo, Central Commission for Discipline Inspection, China, China Resources Holdings, Helen Yang Lijuan, Hong Kong, Shanxi Jinye Coal and Coking Group, Song Lin, UBS, Wang Wenzhi, money laundering

Song Lin, the chairman of state-controlled China Resources, was fired Sunday for "suspected serious violations of discipline and law violations."

China's Xinhua news agency said Song, 51, was dismissed from his post as chairman and party boss of China Resources Holdings, the parent group of five Hong Kong-listed companies.

"The dismissal was prompted by an online exposé four days earlier of an alleged extramarital affair involving Song. It proved the last straw in a year-long campaign by two mainland journalists to pressure Beijing into taking action against Song," the South China Morning Post said.

Song was replaced by general manager Qiao Shibo.

Wang Wenzhi, a journalist with the Economic Information Daily newspaper run by Xinhua, said Song had an affair with Helen Yang Lijuan, a senior investment banker with UBS in Hong Kong. "She allegedly helped him to launder money," Wang said.

China's Central Commission for Discipline Inspection announced last Thursday that Song was under investigation for "suspected serious violations of discipline and law."

Violating discipline is the jargon commonly used to refer to corrupt activities.

Last July, Wang accused a China Resources subsidiary of over paying to acquire Shanxi Jinye Coal and Coking Group.

Wang said on his blog that China Resources paid for the acquisition ahead of schedule, leading to a huge loss of state-owned assets.

Other senior officials could be implicated in Song's case, Wang said on his blog.

China Resources -- which has denied all allegations -- said it will fully co-operate with the investigation, the SCMP said.

"Song, who spent 30 years at China Resources, is one of the most senior executives of a state-owned enterprise with service in Hong Kong to have been brought down by corruption," the paper said.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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