Fall of Premier Zhu's protege 'tragic waste'

China's announcement last week that former high-flier Zhu Xiaohua will stand trial for financial crimes has been seen as a move aimed at clearing the accounts of prominent corruption cases before the 16th Communist Party Congress in November.

But the case of Zhu, former head of China Everbright Group and a one-time protege of Premier Zhu Rongji, has been called a tragic waste of talent that is likely to be repeated unless there is much more supervision of mainland financial institutions.

Zhu, 52, was described as bright and open minded. Hewas given unchecked power when sent to Hong Kong to take charge of the Everbright Group in 1996.

'Everybody was flattering him when he came to Hong Kong,' said a financial industry executive who first met him years ago. 'They wanted to play golf with him. And there was a lot of temptation.'

Others recall attending receptions with long queues of people eager to get to know the man behind the mainland company that was making a name for itself in Hong Kong. They add that Zhu had a modest mainland salary but wielded a considerable amount of power.

Zhu, a former deputy governor of the central bank, was sent from Beijing to clean up the Everbright Group which had gained a reputation as having financial problems ever since its early days under the direction of Wang Guangying.

He was known as 'little boss Zhu' a reference to his ties to Premier Zhu who was widely referred to as 'boss Zhu'.

He was also the head of the State Administration of Foreign Exchange, which supervised the nation's foreign exchange, and had earlier served as the central bank's man at Xinhua in Hong Kong as well as a special appointee to the International Monetary Fund in Washington.

Premier Zhu chose him for bigger and better things because he spoke his mind even if it meant crossing his demanding boss.

'Everybody else would keep quiet but he would speak up,' the finance industry executive said.

'It is a tragedy and China will have more tragedies like that' unless internal controls were tightened, he said.

Xinhua said Zhu was arrested for taking bribes of several million Hong Kong dollars and making improper loans.

He has been dismissed from state posts and expelled from the Communist Party.

His case is one of several prominent instances of corruption to have jolted the mainland's financial sector. The most recent is that of Wang Xuebing, former Bank of China president, who was detained in January.

The Bank of China's former Anhui branch chief, Wu Fuwu, has also been sentenced to 16 years in jail on corruption charges.

Li Fuxiang, a former head of the State Administration of Foreign Exchange, jumped to his death from a hospital window in 2000. There has been speculation he may have been under investigation at the time of his death.