Risk-report fraud sparks probe

PUBLISHED : Wednesday, 22 July, 2009, 12:00am
UPDATED : Wednesday, 22 July, 2009, 12:00am

Two officials from Guangzhou's geological survey institute are under investigation for selling risk reports to construction and landscaping companies for 25,000 yuan (HK$28,400) each.

The two officials - surnamed Luo and Huang - began issuing reports tailored to companies' needs in 2006, a joint investigation by Guangdong Television and The Southern Metropolis News found. It is not known how many construction sites have been potentially put at risk.

Huang Wenbo, deputy director of Guangzhou's Land Resources and Housing Bureau, said the pair were suspended from duty on Monday. Describing the fraud as 'very serious', Mr Huang said his office would investigate its scale and revamp the approval system for land use to prevent further abuse.

Luo, an engineer who was deputy head of the institute's auditing department, was the more senior of the duo.

The institute began issuing blank reports in 2006, which Mr Huang claimed was to give officials flexibility in case of emergencies.

'They can fill in what has happened and what action needs to be taken immediately to prevent a disaster when a plot of land is found to pose a geological risk.

'Obviously the arrangement has loopholes and some people are abusing them,' Mr Huang said, adding that authorities were investigating whether other officials had also sold the reports for personal profit.

According to the investigation, one of the risk reports was bought by a company that mined soil in Panyu , Guangzhou. Construction workers said each truckload of soil was worth 500 yuan.

Mr Huang said the authorities would go through every geological-risk report the institute had issued since July 2006. It would also put serial numbers on blank reports.

The city government will conduct a comprehensive review of the land and housing bureau's work to find out whether there are further loopholes open to abuse.