A property developer and former Shanghai Electric Group official whose arrest was announced last week is suspected of embezzling 50 million yuan from the group's pension fund, a mainland newspaper said yesterday.
Shanghai announced last Thursday that Li Songjian, former chairman of the Mingyuan Group and a non-executive director of Shanghai Electric, had been arrested for misusing public funds. Mingyuan is also a main shareholder in Shanghai Electric.
The 21st Century Business Herald said Mr Li conspired with former Shanghai Electric executive director Han Guozhang to embezzle the funds, set up Guangdong-based Mingguang Investment and finally acquire a minority stake in Shanghai Electric.
The newspaper was quoting from a document issued by the Shanghai branch of the Chinese People's Political Consultative Conference. Last week the body removed Mr Li as a member.
Authorities detained Mr Han last year, along with several other officials linked to Shanghai Electric. Company and government officials declined to comment yesterday.
Mr Li became a shareholder in Shanghai Electric in 2004. He paid 400 million yuan through Mingguang Investment for a 4 per cent stake and later earned 320 million yuan in profits after Shanghai Electric went public.