China has formally arrested eight managers of a billion-dollar
steel factory in eastern China on charges of evading some seven
million yuan (US$845,000) in taxes, state press said.
The eight have been in detention since April, when Chinese
Premier Wen Jiabao put a halt to the construction of the US$1.28
billion Jiangsu
Tieban Iron and Steel Co Ltd plant amid allegations of corruption
and mismanagement.
The move was also widely seen as part of efforts by the central
government to curb overheating in the economy, especially the
red-hot steel sector.
Those arrested were company manager Dai Guofang and his wife
Huang Heqin, vice manager Zhang Xiqing and other company officials
and accountants, Xinhua News Agency said on its website.
Specific charges against them related to 10 sales receipts for
the purchase of scrap steel which allowed the company to evade 7.0
million yuan in taxes, it said.
The project in the eastern province of Jiangsu had an expected
production capacity of 8.4 million tons and total investment of
10.6 billion yuan (US$1.28 billion).
It was announced this month that another massive steel
manufacturing project could also be stopped over alleged
irregularities.
The US$1.2 billion Ningbo Steel project in Ningbo city, eastern
Zhejiang
Province, was awaiting a final judgment from the State Development
and Reform Commission (SDRC), officials said last week.
The joint venture between Chinese, Hong Kong and US investment
firms was originally expected to go into production in August.
The project, linked with former official-turned-businessman
Zhang Zhixiang, was allegedly started without Beijing's
approval.
The clampdown on the two projects have been widely seen as steps
by the government to slow down China's economy, which powered its
way to 9.8 percent growth in the first quarter of 2004 from an
already hot 9.1 percent in 2003.
(China Daily June 13, 2004)