01/25/2007, 00.00
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Charges and arrests for the ‘Gang of Shanghai’

Top officials and business people are forced to resign or arrested for embezzling public funds. For analysts this is part of the ongoing struggle between President Hu Jintao and Jiang Zemin’s loyalists within the party. An important first test is coming up in May when the new Shanghai party secretary will be named to replace Chen Liangyu.

Beijing (AsiaNews/Agencies) – House-cleaning in Shanghai’s Communist leadership continues. Fan Deguan, secretary-general of the municipal committee of Shanghai's Communist Party, yesterday tendered his resignation, government sources reported.

Mr Fan had a brilliant career rising from deputy headmaster of a county school to become one of the most powerful figures in Shanghai and a close aide to former party boss Chen Liangyu.

Mr Chen was removed in September of last year for allegedly misappropriating about 10 billion yuan from the city's pension fund to use in high risk ventures.

Since July 2006 similar charges have been laid against several top city and party officials in Shanghai as well as against prominent business leaders.

On Tuesday the Communist Party announced the expulsion of Qiu Xiaohua, the former head of the National Bureau of Statistics who had been sacked on charges of corruption (taking bribes) and depravity (having more than one wife). Once considered one of the country’s top economist he was dismissed from his post on October 12, 2006, to which he had just been appointed (March 2006). He had been deputy director since 1999.

Unofficial sources report that he was linked to Zhang Rongkun, a non-executive director of the Shanghai Electric and Shanghai Fuxi Investment Company and 16th richest man in China, who was arrested for allegedly getting a 3.2 billion yuan loan from the Shanghai pension fund for his own investments. Reports say Mr Qiu accepted a home in Shanghai as a gift.

Last Sunday city prosecutors also announced that they had formally arrested business tycoon Chau Ching-ngai on charges of giving bribes and falsifying tax invoices.

Similarly, on January 11 Li Songjian, former chairman of the Mingyuan Group and a non-executive director of Shanghai Electric, was arrested for embezzling 50 million yuan from the group's pension fund to acquire a stake in the company itself.

Earlier this month, Tang Haigen, head of two Shanghai companies, allegedly took 200 million yuan from a listed company and used the funds to buy land.

In 2006 more than 200 graft cases involving government officials prompted city prosecutors to investigate 495 people from government agencies and state-owned enterprises, ordering the arrest of 81 top officials.

The judge’s gavel has also started to drop. In one case, Zhang Weimin, former chief of the Shanghai Tobacco Monopoly Administration's Jiading district bureau, was sentenced to 20 years in jail for taking 3 million yuan in bribes and failing to explain the source of a further 13 million yuan in assets.

From the flurry of inquiries it would seem that China’s current leadership has started spring cleaning to rid the party of its corrupt elements. Yesterday for instance, Premier Wen Jiabao chaired a State Council meeting that ordered a thorough investigation into corruption allegations involving the State Food and Drug Administration and its former chief Zheng Xiaoyu.

Some analysts though think that this newly-found aversion for corruption might simply reflect President Hu Jintao’s desire to bury his predecessor’s power base. Former President Jiang Zemin was at one time mayor of Shanghai and knew all of the fallen leaders.

Later on this year the Communist Party is scheduled to hold its 17th Party Congress and according to various sources Mr Hu is trying to consolidate his grip on power but is meeting resistance from groups tied to Jiang. Should this be the case, charges against members of the Gang of Shanghai are designed to weaken Hu’s adversaries’ attempt to get an advantageous compromise.

In the meantime party watchers are waiting to see what happens at the next meeting of the Shanghai Communist Party in May which should pick the next party boss. Shanghai’s current mayor, Han Zheng has been its acting chief and people are waiting to see whether he will stay on or be replaced by one of Hu’s people. (PB)

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