Corruption in China

Disgraced Shanghai party boss goes on trial

PUBLISHED : Thursday, 27 March, 2008, 12:00am
UPDATED : Thursday, 27 March, 2008, 12:00am

The trial of former Shanghai party secretary Chen Liangyu has begun, his lawyer said yesterday, in one of the mainland's most high-profile corruption cases.

'Chen Liangyu's case went to trial yesterday [Tuesday], but there was no verdict. I don't know when there will be a judgment,' his lawyer, Gao Zicheng , said.

Authorities removed Chen from his position as Shanghai party chief in September 2006 and expelled him from the party in July last year for his alleged role in embezzling social security funds.

Mr Gao said his client was in good spirits, following rumours Chen was suffering from psychological problems. 'Chen's mental state is very good,' he said, but declined to give further details about the trial.

Tianjin No2 Intermediate People's Court, where the trial is being held, declined to comment.

There is speculation the Supreme People's Court chose the venue for its proximity to Beijing, where Chen is being held, and to avoid Shanghai, where he might still have political influence.

The government has accused Chen of allowing pension funds to be loaned to help people buy shares in state firms and of abusing his power to benefit people close to him. Other charges are related to helping relatives profit in business, using his political position to secure sexual favours and protecting his associates after they violated rules.

A mainland newspaper said yesterday that abuse of Shanghai's social security funds was far greater than previously revealed. Quoting a report from the National Audit Office, the 21st Century Business Herald said 25.5 billion yuan (HK$28.18 billion) was missing from Shanghai's social security funds as of July 2006.

The managers of the city's social security funds lent 20 billion yuan to property companies, the newspaper said. Shanghai's property market boomed during Chen's administration, defying calls by the central government to lower housing prices.

A spokesman from the audit office was unable to confirm the report.

In January last year, Shanghai Mayor Han Zheng told lawmakers the misappropriation of funds involved only 3.7 billion yuan - including both principal and interest - and that it had all been recovered.

More than 25 officials have been implicated in the pension fund case and most have already been tried. In the most severe sentence to date, former Shanghai Electric Group chairman Wang Chengming was given a suspended death sentence for corruption and taking 210,000 yuan in bribes.

There has been speculation Chen might face a death sentence given the sum of money involved, but some analysts doubt he will be executed.

President Hu Jintao is widely believed to have used the Shanghai corruption case to oust his political opponents and tighten his control over the financial capital, the home base of former president Jiang Zemin .