The contract that brought down China's rail minister Liu Zhijun
The downfall of rail chief Liu Zhijun began with an inkling of a fishy deal, report says
It was one of tens of thousands of contracts for the 200 billion yuan (HK$253 billion) Beijing-Shanghai high-speed rail project but it ignited auditors' suspicions and eventually brought down then-railways minister Liu Zhijun, reported on Monday.
The equipment deal was for 50 million yuan - not a lot in the scheme of things - but staff from the National Audit Office's branch in Jinan, Shandong province, noticed during an initial assessment in 2009 that the bid had been "won" by a company with no expertise in rail construction, the report said.
The money was then transferred to a company called Dongrun, which did not issue an invoice for the purchase of the equipment.
Its licence to buy equipment had also been revoked.
Dongrun was controlled by businesswoman Ding Shumiao, who also headed up two other firms that were the eventual recipients of the money, the report said.
When auditors visited Dongrun to see the equipment, an executive said it had been sent to Madagascar, but there was no declaration record of the shipment with customs, the report said.
The auditors suspected the 50 million yuan contract was the tip of an iceberg of huge economic crimes.
They became even more suspicious when they noticed that Ding's companies, which did billions of yuan in business, appeared to be paying very little in tax, it said.
The auditors did a little more digging and found that Ding was very successful at helping various companies win contracts for the high-speed project.
In all, she received more than 200 million yuan in agent fees to help facilitate contracts for the line, the report said.
One auditor believed Ding, also known as Ding Yuxin, was acting as a go-between for an official but the office had limited powers of investigation.
The office reported its findings to the Communist Party's Central Commission for Discipline Inspection, which has greater powers to examine the activities of officials. The CCDI verified that the 50 million yuan was part of agent fees paid to Ding, and they detained her in December, 2010.
According to prosecutors, Ding helped 23 companies win 57 railway construction projects, 53 of which were approved by Liu.
The report said Ding made 2 billion yuan in profit from working with Liu to carve up more than 180 billion yuan worth of projects. In return for a share of the agent's fees, Liu made sure those companies who paid Ding won the bids, according to .
She was sentenced to 20 years in jail and fined 2.5 billion yuan last year.
Liu was given a suspended death sentence after he was convicted of bribery and abuse of power in 2013.
