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China whistleblower alleges billion-dollar fraud

On July 17, Wang Wenzhi, chief correspondent at the Economic Information Daily, used his verified Weibo account to expose the Chairman of state-owned China Resources Holdings, also known as Huarun Group, for allegedly stealing state-owned assets worth billions of Yuan.

Established in 1983, the Hong Kong-headquartered China Resources Holdings manufactures and distributes consumer goods, gas, medicine and chemical products.

In his Weibo post, Wang accused Huarun Group’s subsidiary, China Resources Power of paying an inflated price to acquire Shanxi Jinye Coal and Coking Group three years ago under group Chairman Song Lin. Huarun Group also paid for the acquisition ahead of schedule, leading to a huge loss of state-owned assets, the post said.

Wang has forwarded materials related to the case to the Central Commission for Discipline Inspection (CCDI).
“I am very optimistic about the investigation results based on the current situation and evidence,” said Wang. Huarun Group has denied all accusations of wrongdoing.

Six China Resources Power shareholders recently filed a law suit in Hong Kong against 20 directors of the company, including Song Lin, over the fraudulent acquisition.

“I have thought about retaliation before the real-name reporting, but I have to do the just thing,” Wang told Beijing News.

Whistleblowers who reveal their identities are not always safe. Earlier this month, amateur whistleblower Li Jianxin was brutally attacked in the southern city of Huizhou (Guangdong province) for publishing reports revealing practices of local gangsters and corrupt officials. After Li’s car was rammed, he was blinded with acid and had two of his fingers chopped off.

Sources: Caijing (财经网), China News (中国新闻网)

A version of this post first appeared in the China Compliance Digest.


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