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Big sweep in Sinograin corruption scandal

China Grain Reserves Corporation, also known as Sinograin, the state-owned grain storage enterprise that has long been enmeshed in corruption and embezzlement scandals, is the center of another corruption probe.

Chinese newspaper Outlook Weekly, owned by the Xinhua News Agency, reported recently that 110 Sinograin employees in Henan province have been investigated by local prosecutors for swindling the company out of 700 million yuan ($114.5 million) and taking bribes from grain retailers in exchange for awarding grain storage contracts.

The probe into Sinograin began in November 2011, after the company’s Zhoukou (Henan province) storage director, Qiao Jianjun, fled overseas with 300 million yuan ($49 million) of embezzled public funds. Prosecutors believe Qiao colluded with grain retailers to inflate grain purchases to swindle funds from the state. 

During the investigation of Qiao’s case, prosecutors uncovered misconduct by 110 Sinograin employees based on whistleblowers’ reports and external audits.

Li Changxuan, the general manager of Sinograin’s Henan province branch, received a life sentence last month for taking 14 million yuan ($2.3 million) in bribes and owning 8.9 million yuan ($1.4 million) unexplained assets.

The central government holds a strict monopoly over China’s grain market and injects heavy subsidies to stabilize prices. But a public-private partnership to outsource grain buying and storage has created opportunities for graft.

Source: Outlook Weekly (瞭望新闻周刊), Global Times

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Hui Zhi is a Senior China Analyst with ethiXbase and the China Compliance Digest.

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