The company led by a scrap paper merchant who topped China's rich list in 2006 violated workers' legal rights and interests and used penalties too much, a Guangdong trade union official said yesterday.

Kong Xianghong, vice chairman of the Guangdong Provincial Trade Unions Federation, also alleged management problems in the company, Nine Dragon's Paper (Holding) Ltd, owned by Zhang Yin. Kong's remarks came after Hong Kong student organizations published a report alleging misbehavior in five Hong Kong-listed companies, including Nine Dragons Paper.

The report was jointly compiled by Students and Scholars Against Corporate Misbehavior (SACOM) and student unions of two Hong Kong universities. The report condemned Zhang's company as "shameful among Hong Kong companies" because of unsafe working conditions, bad welfare treatment and other issues violating labor laws and regulations.

Kong said the trade union had dispatched six investigators to conduct a sample survey among 100 Nine Dragons Paper workers into issues of welfare, work safety, unreasonable penalties, and job satisfaction.

Welfare policies were found to be satisfactory but there were violations of workers' legal rights and interests and excessive use of penalties in the company, Kong said.

He said the company admitted using improper fining regulations and promised to hold talks on the issue. Zhang, 51, is founder of Nine Dragons, one of the world largest paper manufacturers.

(Xinhua News Agency April 27, 2008)