Zhou Yongkang

Firms profited in 'shady coal-rights deals'

PUBLISHED : Tuesday, 15 April, 2014, 5:19am
UPDATED : Tuesday, 15 April, 2014, 8:03am

Three privately owned companies in Shaanxi have been accused of using officials' influence to gain the rights to explore coal resources in the province and later benefiting by more than 10 billion yuan (HK$12.5 billion) when two of them sold shares in the ventures to other firms, a mainland newspaper reported yesterday.

A well-connected businessman surnamed Zhou had helped "pull strings" for the three companies to get the paperwork approved, The Beijing News reported.

The report said acquiring the exploration rights needed clearance from the Ministry of Land and Resources, the National Development and Reform Commission and state-owned energy giant China National Petroleum Corporation.

The allegations come amid thinly veiled reports by mainland media about the corruption probe into Zhou Yongkang and his immediate family members, including his son, businessman Zhou Bin.

The land ministry and China National Petroleum were among Zhou Yongkang's powerbases.

The South China Morning Post revealed in August that party leaders had privately agreed to open a corruption investigation into the former member of the powerful Politburo Standing Committee.

The three companies in Shaanxi acquired exploration permits in an area of 580 square kilometres in Jingbian county in 2005, two years before it was officially announced that there were large coal reserves in the area, The Beijing News said.

Geologists in Shaanxi said in September 2007 that they had found 3.6 billion tonnes of high-quality coal in the region. The ministry of land and resources froze approval for new coal exploration permits that same year. After paying a fee of less than one billion yuan to the ministry in 2010, the three companies transferred their shares to other companies.

Two of them made a profit of more than 10 billion yuan through the transactions, the report said, citing public documents. Several officials and businessmen involved in the deals are already under investigation, the report said.

Meanwhile, China National Petroleum said it was carrying out its annual review of efforts to stamp out corruption in the company. The corporation's former head, Jiang Jiemin, is under investigation for alleged graft. Jiang was a prominent ally of Zhou Yongkang, who spent much of his career working in the oil industry.