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China to prosecute nine in pension scandal

China plans to prosecute nine former government and state industry officials over a politically charged pension fund scandal in Shanghai, state media reported yesterday.

The announcement comes just two days before the opening of the new session of the national legislature, at which top leaders are expected to renew their determination to strike out at corruption eating away at the Chinese Communist Party's legitimacy.

Local media reports said the nine, who include the former chief of the Shanghai Labor and Social Security Bureau, have been kicked out of the party and their cases given to prosecutors for indictment.

Charges ranged from taking bribes including cash and expensive wristwatches, illegally aiding friends and relatives, and leading "immoral and corrupt lifestyles," newspapers said.

They did not say when the officials would be formally indicted.

The government has alleged that the officials took the bribes in exchange for providing state money for high-risk investments.

Figures for the amount diverted from the city's pension and housing fund vary, although the Shanghai Daily yesterday said 3.7 billion yuan (US$483 million) had been channeled into risky real estate, toll road and other investments.

Shanghai's mayor said in January that all the misused funds had been recovered, although he gave no figures.

The prosecutions mark a major development in the scandal that has already toppled the city's Communist Party boss, Chen Liangyu (陳良宇), and seen more than a dozen other officials and business executives detained for questioning.

Chen's dismissal -- there has been no word on the status of his case -- was widely seen as a move by President Hu Jintao (胡錦濤) to use an anti-graft campaign to remove political opponents ahead of a major Communist Party congress later this year.

Chen is the highest-ranking politician to be fired for corruption in over a decade.

Chinese leaders have long warned that corruption threatens their rule.

But the Shanghai case has lent those calls new heft by showing that not even as powerful a politician as Chen is immune.

The party's Central Commission for Discipline Inspection said last month that nearly 100,000 party members were punished for corruption last year.

Those cases include China's former top statistician and reputed Chen associate Qiu Xiaohua (邱曉華), who is accused of taking bribes and having more than one wife.

In a separate case, the official Xinhua news agency reported yesterday that Zheng Xiaoyu (鄭筱萸), the former director of the State Food and Drug Administration, has also been expelled from the party. Zheng was dismissed from his job running China's drug administration in 2005 and is suspected of taking bribes to allow companies to circumvent drug approval regulations.

Media reports said the leading Shanghai officials now facing prosecution include a former chief of the Shanghai Labor and Social Security Bureau and a district party chief and former personal secretary to Chen.

Others include two top officials with the government-owned Shanghai Electric Group, and the former general manager of the Shanghai Industrial Investment Group.
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