Date
13 December 2017
China Resources' Song Lin is the latest mainland official to feel the heat of Beijing's anti-corruption drive. Photo: Bloomberg
China Resources' Song Lin is the latest mainland official to feel the heat of Beijing's anti-corruption drive. Photo: Bloomberg

China Resources’ Song saga has many undercurrents

China Resources Holdings chairman Song Lin {宋林} is the seventh senior mainland official, and perhaps the most high profile one, to be sacked and placed under an investigation this year amid an anti-graft campaign by Beijing.

CR Holdings, based in Hong Kong, is one of China’s few state-owned enterprises that have domicile outside the mainland. The conglomerate’s history can be traced back to many years before the founding of the People’s Republic of China in 1949. Song, 51, has been at the helm of the firm since 2008 and was also its party chief, enjoying an official rank on par with a vice minister within China’s political hierarchy.

Song’s case has drawn much attention not only due to the huge size of CR Holdings and its many listed subsidiaries, but also because of serial exposés by two mainland journalists on various alleged misdeeds. In blog posts, the reporters had blamed Song for causing huge loss to the state by prompting China Resources Power (00836.HK) to acquire coal companies in Shanxi at inflated prices. Other charges included bribe-taking and money laundering, as well as extramarital affairs.

Before he was detained by the Communist Party’s Central Commission for Discipline Inspection, Song rejected the charges last Wednesday, saying all the allegations were pure “slander” and that he would seek legal remedy.

News began to circulate over the weekend that by dismissing Song, the party’s anti-graft czar Wang Qishan {王岐山}, one of the seven standing members of the Communist Party’s Central Politburo, could be planning to go after He Guoqiang {賀國強}, Wang’s predecessor at the discipline watchdog. Financial Times has noted in a report that Song is closely associated with He Guoqiang’s son He Jintao {賀錦濤}.

China’s top leader Xi Jinping {習近平} is reported to have given his full backing to Wang. 

It is said that Song’s promotion to CR Holdings chairman was the result of the junior He’s wielding influence behind the scenes and that Song requited “tens of millions of yuan” to the He family in return. He Jintao is also said to have pulled strings during CR Power’s takeover of Shanxi Jinye {金業} Coal and Coking Group back in 2010 in which CR Power quoted a price that was 5 billion yuan (US$803 million) higher than other bidders.

Li Jianjun {李建軍}, a former reporter at Shanxi Evening News and the whistleblower on Song’s corruption, has revealed that former Chinese Premier Wen Jiabao {溫家寶} requested the Ministry of Supervision and the National Audit Office to look into Song’s suspected violations in 2011, but the investigation was subsequently called off by He Guoqiang.

It’s interesting to see that He Guoqiang got special mention when mainland media, including popular news portal NetEase, reported Song’s dismissal on Monday. And, posts hinting that He Guoqiang is involved in the Song case were initially not censored on China’s WeChat and Twitter-like Weibo platforms.

The case also puts Hong Kong’s securities regulators and anti-graft watchdog in an embarrassing position as it shows that the authorities have been lax in scrutinizing Chinese state-owned firms listed in the city.

Last year, Li Jianjun filed a case against Song at the Independent Commission Against Corruption (ICAC) and the Commercial Crime Bureau of the Hong Kong Police Force and presented all evidence in hand, yet no action was taken by the two departments.

And, what lends some irony is the fact that, before the dismissal, Song held several public service positions in Hong Kong including the chairmanship of ICAC’s Hong Kong Ethics Development Centre, an organization established to promote clean and fair business environment. Song is also the chairman of Hong Kong Chinese Enterprises Association and a member of the Hong Kong government’s Economic Development Commission. Last year he was appointed Justice of the Peace.

– Contact the writer at [email protected]

RC

EJ Insight writer

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