A former mayor in Shanxi, who was sacked for failing to curtail illegal mining operations in his city, has turned out to be a key figure in helping China Resources to make inroads in the coal-rich province.
Yan Guoping, former mayor of Fenyang, remained listed on China Resources Power's website as a top executive of its coal business. But his superior, China Resources' disgraced chairman Song Lin, and a few of the group's top executives, have been probed by the authorities over the past two weeks over graft allegations.
Yan, as legal representative of a joint venture led by China Resources Power's coal unit, Taiyuan China Resources Coal (CR Taiyuan), signed a transfer agreement with Shanxi Jinye Group (Jinye) in August last year in which Jinye transferred mining rights of the Hongyatou coal mine to CR Taiyuan, according to a mandatory public notice of the contract issued by the provincial land and resources bureau.
The agreement consummated part of a 2010 deal, of which two mainland journalists alleged improprieties on their Sina Weibo accounts last year. They accused China Resources Holdings' former chairman Song of orchestrating the company's alleged overpayment for Jinye's coal-related assets.
Song was chairman of CRP from late 2003, when the firm was listed, until July 2010, a few months after the deal was signed.
Yan, together with his deputy mayor in Fenyang, was removed from office in 2008 after the provincial commission for discipline inspection found over 60 illegal coal mining operations in his jurisdiction, China News Service reported in October 2008.
Media coverage has cast light on Yan's long connection to Xing Libin, chairman of Shanxi's largest privately owned coal miner - the firm reportedly responsible for introducing Song to the owner of Jinye.
In 2002, when Yan was the chief of Liulin county, Xing acquired one of the largest coal mines in the county for 80 million yuan, allowing him to ride a decade-long coal mining boom to become one of the province's richest businessmen. Xing sold the mine in 2008 to a company later acquired by a state-owned steel giant, Shougang Group.
With an insider's knowledge of the province's massive coal industry, CRP recruited Yan as director of development of its coal unit on February 5, 2010. He became deputy general manager later that year.
A spokeswoman from China Resources contacted on Friday said Yan was busy and had no time "to take interviews". Other company executives also declined interview requests.
The Economic Observer reported on Saturday that Yan and Xing helped the firm acquire dozens of coal mining assets.
Yan and Xing were also co-directors of Shanxi China Resources Liansheng Energy Investment, a joint venture Xing and China Resources set up in 2009. The company holds 49 per cent of CR Taiyuan, the venture formed in April 2010 to acquire coal-related assets from Jinye.
According to posts made online by the two mainland journalists, CRP signed a corporate restructuring agreement with Shanxi Jinye on February 9, 2010, in which the state-owned company acquired a bundle of Jinye's assets for 7.9 billion yuan (HK$9.92 billion).
Mainland media reported that Xing was placed under investigation in March.