No. 34 of 2015 (General Serial No.231):29 Judicial Cases and Other Issues Transferred by the CNAO Resolved as of November 2015
(December 27, 2015)
The CNAO regularly followed up and acquainted itself with how the cases and issues were being addressed, which the CNAO had transferred to relevant departments and units. The resolved cases and issues that have been gathered until November 2015 are hereby announced as follows:
1. The case regarding letting Private Enterprises seek illegal profits through irregular operations in Highway Construction by Wang Xiaolin, former Deputy Director of Shanxi Communications Department.
The audit investigation showed that from 2002 to 2004, Wang Xiaolin had irregularly introduced financially unqualified company of Shanxi Zhonghai Investment Co., Ltd(the actual controller Wang Desheng) into the Highway Construction from Xinzhou, Shanxi to Fuping Hebei. The company obtained a profit of RMB180million by reselling highway construction management right. In March 2013, the CNAO referred the clues to the Central Commission for Discipline Inspection and Ministry of Public Security for further investigation. Until November 2015, Shanxi Provincial Commission for Discipline Inspection, Public Security Bureau and the Department of Transportation had made an investigation on 243 persons responsible, collected cash and items of more than RMB47.57 million received by Wang Xiaolin and detained cash and houses of Wang Desheng of more than RMB58.55 million.
2. The case of misappropriation of funds by Zhang Yadong, former Assistant Director of Rural Credit Cooperatives, Hebei Province.
The audit showed that from 2008 to 2009, Zhang Yadong and Bi Lihui, the Bond trader of the Cooperatives, had taken the advantages of their positions to transfer related bond yields of more than RMB20 million to their relatives through Jiang Yin Runkang Investment Management Ltd.(the actual controller Liu Xiaojing). In April 2013, the CNAO referred the clues to the Supreme People's Procuratorate for further investigation. In October 2015, the Intermediate People's Court of Changchun Jilin sentenced Zhang Yadong, Bi Lihui and Liu Xiaojing to 5 or 6 years’ imprisonment and confiscated all illegal income on charge of Misappropriation of funds.
3. The case of falsifying drug purchase and sale invoices for tax evasion by 15 enterprises including Shandong Hai Kang Pharmaceutical Co., Ltd etc.
The audit showed that from 2009 to 2013, 15 Pharmaceutical enterprises including Shandong Hai Kang Pharmaceutical Co., Ltd etc. had falsified value-added tax invoices, resulting in RMB1.85 billion of tax evasion through fictitious sales, inflated the price of drugs and fiscal manipulation equipment etc. From 2012 to 2014, the CNAO had referred the clues above to the Administration of Taxation, Ministry of Public Security for further investigation. By November 2015, Administration of Taxation and Ministry of Public Security had checked and made up taxes and fines of RMB2.229 billion. The responsible persons were sentenced to 7 to 12 years’ imprisonment.
4. The case of falsifying value-added tax invoices by 20 enterprises in Tianjin
The audit showed that from 2011 to 2013, 20 enterprises including Tianjin Baidewang Metal Materials Co., Ltd. and Tianjin Zhongke Electric Technology Co., Ltd. had falsified RMB1.036 billion of value-added tax invoices. Some of them were used for deducting output tax, resulting in the loss of value-added taxesof over RMB100 million. In July 2013, the CNAO referred the clues above to the Administration of Taxation, Ministry of Public Security for further investigation. By November 2015, those who were responsible had been sentenced to 2 to 13 years’ imprisonment and fine of RMB660,000.
5.The case of taking advantages of the position for personal gain by Luo Huiwen, former president of Henan branch of People’s Daily.
The audit showed that from 2009 to 2010, Luo Huiwen, former president of Henan branch of People’s Daily, had irregularly introduced unqualified company into co-building in the Construction of Henan Branch Network Media Building and promised to give 20% of the profits to the company even though the company didn’t invest any fund. In December 2013, the CNAO referred the clues to The Central Commission for Discipline Inspection Organization for further investigation. In November 2015, Luo Huiwen had been expelled from the party and deposed from office by People's Daily Editorial Board as punishment.
6. The case concerning maternity insurance fraud by Hangzhou Zhongyi Printing Technology Co., Ltd.
The audit showed that from 2009 to 2010, Hangzhou Zhongyi Printing Technology Co., Ltd.(the actual controller Chen Jing) had obtained a maternity insurance of more than RMB300,000by fraud through fictionalizing hiring of pregnant female employee. In May 2012, the CNAO referred the clues to Zhejiang Provincial Public Security Organization for further investigation. In July 2015, People's Court of Gongshu Hangzhou sentenced Chen Jing to 12 years’ imprisonment and fine of RMB40,000 and orderedall that had been obtained illegally to be returned.
7. The case of bribery and the case of taking advantages of ones’ positions to seek profits for ones’ relativesof some management staff at Shaanxi Industrial Technology Research Institute.
The audit showed that from 2007 to 2011, without a collective research, Yao Jianjun, former executive vice president of Shaanxi Industrial Technology Research Institute, and Chen Yong, former chief accountant, decided to have the Institute to allocate over RMB45 million to subscribe the added directional equity of the listed company and privately collected equity. They transferred the equity at low prize to Chen Yong’s friend within restricted period, giving him the profits. In December 2013, the CNAO referred the clues to The Central Commission for Discipline Inspection Organization for further investigation. By November 2015, Xi'an Jiao Tong University had given Yao Jianjun the punishment of one year probation in the Party and administrative demotion. The equity profit of RMB2.15 million received by Chen Yong was submitted to the Clean Account of Shaanxi Provincial Commission for Discipline Inspection.
8. The case of irregularly adjusting the volume rate of construction land by Shenzhen Land Bureau and other departments
The audit showed that in 2007, Shenzhen Land Bureau and Shenzhen Municipal Planning Bureau illegally approved to adjust the volume rate of Shenzhen Meiyue Real Estate Consultants Ltd’s construction land from 1.9 to 4. The net construction area was increased by 77,000 square meters. In addition, Shenzhen Land Bureau and Shenzhen Municipal Planning Bureau didn’t charge on land-transferring fees which should have been paid for adjusting the volume rate of construction, resulting in a company’s profit of over RMB100 million. In 2011, the CNAO referred the clues to Ministry of Supervision, Ministry of Land and organization for further investigation. By November 2015, Shenzhen Municipal Commission for Discipline Inspection had respectively given the 8 responsible persons the punishments of serious warning and probation in the Party. Land-transferring fees which should have been paid were retrieved.
9.The case of Applying for financing illegally for non-compliant enterprises by Xiao Jian, former Vice President of Zhanjiang Branch of Bank of China.
The audit showed that from 2012 to 2013, in the procedure of three affiliated companies’ applying for financing to Zhanjiang Branch of Bank of China with faked financial report, purchase and sale contract and canceled VAT invoices, Xiao Jian let relevant employees of the bank conceal the risk and approve for their credit, resulting in over RMB1.5 billion credit loan funds defrauded. In August 2013, the CNAO referred the clues to China Banking Regulatory Commission, Ministry of Public Security for further investigation. So far, Guangdong Banking Bureau has given Xiao Jian the punishment of lifelong removal of banking financial institutions executive qualifications. Bank of China punished 33 persons who were responsible, one of which were fired, two were punished with the recording of demerit, another two were warned and 28 of which were given a conversation of admonishment and had their performance income deducted
10. The case of alleged loandefrauding by Guangdong Lanyue Energy Development Co., Ltd.
The audit showed that from 2011 to 2013, Guangdong Lanyue Energy Development Co., Ltd. and its owned Huilai Yuedong Power Fuel Co., Ltd. had applied in rotation for obligation pledge loans to six financial institutions including Bank of China and China Construction Bank etc. by signing false coal purchase and sale contracts to fake accounts receivable, and had obtainedloans of RMB2.998 billion by June 2013. In August 2013, the CNAO referred the clues to China Banking Regulatory Commission, Ministry of Public Security for further investigation. So far, the Bank of China has dealt with the problems of 97 persons responsible in six financial institutions, among which 5 have been dismissed, 22 have been punished with recording of major demerit, recording of demerit, demotion of their administrative grades and warning and 70 have been punished with circulated criticisms and financial penalties.
11. The case of alleged illegal bill transaction made by Bai Mingyu, former Chairman of Rural Credit Cooperative Union in Xinbin Manchu Autonomous County, Liaoning Province in cooperating with scalping companies
The audit showed that from November 2012 to September 2013, with the permission of Bai Mingyu, Li Wenkai, former deputy director of the Credit Cooperative Union, Zhang Qingquan, chief of Finance of the Credit Cooperative Union had provided a company with eight unlisted opened bank accounts, stamps, business licenses and copies of blank sticky notes to discount or rediscount, involving the amount of notes of more than RMB130 billion. Profits from discount and rediscount were more than RMB40 million. In June 2014, the CNAO referred the clues to China Banking Regulatory Commission, Ministry of Public Security and Liaoning Province Organization for further investigation. Liaoning Banking Bureau disqualified Bai Mingyu and Li Wenkai ofserving executives qualifications of banking institutions for 10 years. The two persons mentioned above and Zhang Qingquan were also expelled from the Party and dismissed from office.
12. The case of alleged taking of financing fees from three state-owned enterprises by related executives in Sichuan Trust Ltd.
The audit showed that in 2012, the employees of subsidiary institutions of Sichuan Xintuo Ltd. arrogated senior consultants of the company and charged three state-owned enterprises including Guiyang Water and Transport Development and Investment (Group) Co., Ltd.to pay a large amount of financing service fee to designated enterprises, in the name of helping to get trust financing. In October 2013, the CNAO referred the clues to Banking Regulatory Commission and Guizhou Provincial People's Government organizations for further investigation. By November 2015, Sichuan Banking Regulatory Bureau had given Chen Jun, former president of Sichuan Xintuo Ltd., the administrative punishment of disqualification from banking institutions serving executives for 4 years.
13. The case of alleged bribery and taking advantages of the authority to give huge profits to friends and specific enterprises by some managers of China Mobile
The audit showed that from 2004 to 2011, some managers in China Mobile Department of Planning and its six provincial branches had used their authorities to give profits to their friends and some specific enterprises and accepted bribes during the businesses such as bulk purchasing. In January 2013, the CNAO referred the clues to Supervision Organization for further investigation. By June 2015, China Mobile had given ten persons who were responsible the punishment of expulsion from the Party and dismissal from the posts. Among them, four were transferred to judicial organs for further investigation. RMB35.90 million of stolen money was recovered by related departments.
14. The case of becoming shareholders of the relatives of some senior managers of affiliated companies of China Guodian Corporation
The audit showed that from 2007 to 2013, wife of Fei Zhi, former deputy general manager of Guodian Longyuan Power Group Corporation Limited had become shareholder of the Department of Yilan Longyuan Wind Power Co., Ltd., the subsidiary of Guodian Longyuan Power and had gained some benefits. Subunits of Guodian Yinglite Energy and Chemical Group Co., Ltd. had purchased items of more than RMB60 million from Taizhou Dongliang Trading Company which was invested by the brother of General Manager Qin Jiangyu and the brother’s wife. In 2014, the CNAO referred the clues to SAC for further investigation. By November 2015, China Guodian Corporation had punished Fei Zhi and Qin Jiangyu with dismissal from office in the Party and administrative demotion. RMB250,000 of illegally obtained money from the investmentin shares of Fei Zhi was seized.
15.The case of illegal operations to transfer state-owned mining rights at low price resulting in the loss of state-owned rights and interests by Hunan Nonferrous Geological Exploration Bureau
The audit showed that from 2005 to 2012, Hunan Nonferrous Geological Exploration Bureau illegally transferred Yizhang Tianwei - Changchengling Lead-Zinc mining rights at low price. Thus, Baoyuan Mining LLC in Yizhang County obtained illegitimate interests of more than RMB100 milllion. In December 2013, the CNAO referred the clues to The Central Commission for Discipline Inspection Organization for further investigation. By November 2015, RMB9.5 million of the loss of state-owned rights had been recovered by disciplinary and judicial organs during the investigation on five persons who were responsible.
16.The case of illegally compensating mining right costs resulting in the loss of state-owned rights and interests by Jizhong Energy Group Mining Co., Ltd.
The audit showed that in 2012 when purchasing 51% stock of Private Enterprise Shanxi Jinhui Coking Chemical Co., Ltd., Jizhong Energy Group Mining Co., Ltd went against the agreements of two sides to let both sides’ holding companies pay the mining right costs which should be paid by counterpart’s subsidiary, thus, RMB62.35 million was overpaid, resulting in the loss of state-owned rights. In July 2014, the CNAO referred the matter to Department of Supervision Organization of Hebei Province for further investigation. By November 2015, Hebei SASAC Discipline Inspection Commission had held conversations of admonishment with chairman of the board of Jizhong Energy, general manager and the chief accountant of Jinhui Coal Chemical Co., Ltd. and let them deliver a thorough report of self-criticism. RMB62.35 million overpaid had been recovered.
17.The case of alleged illegal distribution of mineral surveying compensation by Cao Yaping, former president of Geophysical Exploration Institute of Heilongjiang Province, resulting in over RMB7 million loss of state-owned rights and interests
The audit showed that in 2008 during the development of Yingcheng Ziyan gold (silver) mine of Ning’an City, Heilongjiang province, Cao Yaping illegally distributed RMB7.65 million of census preliminary work compensation to staff wholly-owned holding company without any investment, resulting in the loss of state-owned rights and interests. In December 2014, the CNAO referred the matter to Heilongjiang Provincial Commission for Discipline Inspection Organization for further investigation. In June 2015, Geology and Mineral Resources Bureau of Heilongjiang Province dismissed Cao Yaping from his position of dean and Party committee member and gave the other two persons responsible an administrative warning in the Party.
18.The case of alleged illegal changing of foreclosed property agreement by Wang Changshui, former Party secretary of Regional Geological Survey Institute in Heilongjiang Province, resulting in the loss of state-owned rights and interests of more than RMB8 million.
The audit showed that in 2011, in the absence of approval from higher authorities, Wang Changshui arbitrarily reduced the estate area offered by Heilongjiang Huanyu Cables Co. Ltd. to the institute to compensate for the transfer money of mine exploration rights, resulting in a loss of state-owned rights and interests of more than RMB8.5 million. In December 2014, the CNAO referred the matter to Heilongjiang Provincial Commission for Discipline Inspection Organization for further investigation. In June 2015, Geology and Mineral Resources Bureau of Heilongjiang Province dismissed Wang Changshui from his position of party secretary and gave the other three persons responsible an administrative warning in the Party.
19. The case of allegedlyillegally operatinglottery betting outlets by 160 public officials in Hubei, Shanghai, Hunan
The audit showed thatby the end of 2014, 160 public officials in Hubei, Shanghai, Hunan illegally operated welfare lottery and sports lottery betting outlets to gain benefits, involving an amount of more than RMB100 million. In 2015, the CNAO referred the clues to Hubei Provincial Department of Supervision and the Shanghai Municipal Supervision Bureau for further investigation. By October 2015, related departments had punished 19 persons responsible with serious warning and recording of major demerit. It held conversations of admonishment, criticism and education for 74 persons responsible. RMB434,700 obtained illegally had been recovered.
20. The case of allegedly extracting or cheating lottery funds by nine units in Yunnan, Chongqing, Shanxi etc.
The audit showed that from 2012 to 2014,five units including Yunnan Kaiyuan Military SupplyStation, Kunming Sports Industry Development Centre, Northeast Chongqing Marketing Sub-Center ofChongqing Welfare Lottery Center, Sports Bureau of Weinan City Shaanxi Province, Table Tennis Association of Qingjian County, Yulin City hadextracted or cheated more than RMB3.90 million funds including lottery issuing fees. Four units including Hubei Sports Management Center, Civil Affairs Bureau of Shuozhou City, Shanxi Province, Gansu Province Sports Lottery Management Center, Geriatric hospital of Wuchang District Wuhan built up a “small treasury”, illegally purchased cars and traveled with public funds, involving lottery funds of more than RMB4.6 million. In 2015, the CNAO referred the clues to Yunnan Provincial Commission for Discipline Inspection, the Chongqing Municipal Bureau of Civil Affairs and other competent departments for further investigation. By October 2015, RMB4.5477 million of fund had been recovered, one person had been sentenced to imprisonment of five years and six months, and ten persons responsible had been punished with serious warning in the Party and administrative dismissal from office.
21. The case of allegedly cheating housing allowance and illegally obtaining subsidyin the affordable housing project by 13 public officials in Shandong and Henan