(March 26, 2014) China’s central government replaces leadership at state-owned Three Gorges Corp. following graft probe. Signals suggest “it is probable there will be further investigations into corruption inside the corporation,” says Probe International’s Patricia Adams.
By Toh Han Shih, published by South China Morning Post
The central government has removed two senior executives of China Three Gorges Corp after an anti-corruption watchdog discovered problems at the state-owned enterprise.
Three Gorges chairman Cao Guangjing and general manager Chen Fei had been removed and would be assigned other jobs, Wang Jingqing, a deputy head of the Organisation Department of the Communist Party’s central committee, said at a company meeting on March 24.
Lu Chun would take over from Cao, while Wang Lin would replace Chen, Wang Jingqing said in a statement on the company’s website.
The leadership change was a decision of the party’s central committee and State Council, based on evidence gathered by the anti-corruption inspection team and feedback from many quarters, he said.
The change also came in the wake of the central government’s corruption investigation of Three Gorges, which was announced last month.
Some associates of unnamed Three Gorges officials were secretly involved in bidding for the company’s projects, said Hou Kai, the head of the anti-corruption inspection group.
The unnamed executives owned several properties, which is against regulations, bought too many cars and sat in excessively large offices, Three Gorges said on its website.
At a meeting on Monday, Wang urged the company to change executives found responsible for the problems uncovered by the anti-graft team and fulfil the company’s duty in fighting corruption.
“Although the investigation was normal, publicly disclosing Three Gorges’ problems is absolutely unusual. It is probable there will be further investigations into corruption inside the corporation,” said Patricia Adams, an executive director of Probe International, a Canadian non-governmental organisation.
“This looks like a very serious matter. It takes fairly unusual circumstances for two top executives at a state-owned enterprise to be removed on the same day,” said Basil Hwang, a partner at law firm Zhong Lun.
An international investor, who declined to be named, said President Xi Jinping was intensifying corruption investigations into the nation’s energy companies because he wanted to reform the energy sector, which is heavily controlled by the state.
The executive changes would spur reform of Three Gorges and strengthen its leadership, Wang said.