A former pension fund official went on trial here on Tuesday for
allegedly misusing millions of yuan of public money, a local court
said.
Prosecutors said Liu Yuhong, an official from Guangzhou, capital
of Guangdong Province, allowed some 750 million yuan (US$100
million) from the social security fund to be invested in "risky"
businesses, including real estate deals and loans, without gaining
approval from his senior management.
Liu committed the malpractice between 1993 and 1996, while he
was manager of the Guangzhou Social Labor and Insurance Co, a firm
affiliated to the city's labor administration, prosecutors
said.
About 520 million yuan of the money has yet to be recovered,
they said.
Liu, who was arrested in December, is the latest official to be
tried over the city's pension fund scandal.
Cui Renquan, the current chief of Guangzhou labor and social
security, said in April that 18 criminal cases related to the
scandal had been filed.
He said Cai Yaokun, former deputy director of Guangzhou city
administration for social insurance, had been sentenced to 10 years
in jail for taking bribes. But he didn't reveal the total number of
people on trial or convicted.
Liu argued in court that he made the investment decisions based
on national and local policies, and the actual loss was only 100
million yuan.
The national policy to which Liu was referring was a document
issued in 1993 by the Ministry of Labor, which encouraged local
officials to increase the value of their pension funds by
transferring a portion of the money into State banks, trusts and
investment companies.
But rampant malpractice prompted the ministry to rescind the
ruling the following year. It also banned the investment of pension
funds on the open market and demanded all money invested in
disallowed commercial ventures, including real estate, were
recovered.
As of March this year, about 360 million yuan of such
investments had been recovered in Guangzhou, and there are hopes a
further 105 million yuan will follow.
However, about 600 million yuan has "vanished" in dead-end
property deals and bad debts, according to official figures.
Zhang Guangning, the mayor of Guangzhou, promised the local
government will match the value of any funds not recovered.
The Yuexiu District People's Court, where Liu's case is being
heard, is yet to announce a verdict.
Pension fund abuse has been in the public eye since Chen
Liangyu, former Party chief of Shanghai, was alleged to have
invested 3.2 billion yuan of the city's pension fund in speculative
real estate and road investment projects.
He was sacked and expelled from the Party.
(Xinhua News Agency November 1, 2007)