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Tuesday
May202014

Sister-act mistresses expose Shanxi graft 

Two sisters who were mistresses to the disgraced former vice chairman of Shanxi provincial People’s Congress standing committee, Jin Daoming (pictured), created a business empire to help Jin launder money and hide corrupt activities, local online news portal Caixin reported.
 
Jin was placed under discipline investigation in February, with no details given on his misconduct.

According to Caixin’s investigative report, the sisters, Hu Xin and Hu Lei, together with their father Hu Xiangrui and mother Xiao Guihua, operated at least seven companies in various industries including real estate, coal mining and information technology. They had won lucrative government contracts thanks to connections with Jin.

“Without special help – the kind that only high-level government officials can provide -- the sisters likely would have never won these contracts,” Caixin said.

Shanxi Aoke Xinde Technology & Trade, a software company owned by the sisters, was awarded a number of government contracts even without necessary technical qualifications.  

The Hu family sold two companies to state-owned enterprises for hundreds of millions of yuan. The deals weren’t recorded in government’s business accounts, the report said.

The sisters spent 86.9 million yuan ($14 million) to buy 20 percent of the shares of state-owned Yuxi Coal Mine, which were valued more than 1 billion yuan ($160 million), according to Caixin.

The sisters had also underpaid government over some land plots they purchased.

The  sisters have not been formally accused of any wrongdoing.

Sources: Caixin, China Business Journal (中国经营报) 

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Hui Zhi is the Senior Manager for Content with the China Compliance Digest, where a version of this post first appeared.