Most of the suspects involved in the misappropriation of more
than 3 billion yuan (US$386 million) from Shanghai's social
security fund have been turned over to judicial departments for
prosecution, Mayor Han Zheng was quoted by the Shanghai
Securities News as saying.
Prosecutors' offices in Shanghai, Jilin and Anhui provinces are
working on the case, Han said during the ongoing Shanghai Municipal
People's Congress.
In addition to the 11 suspects in Shanghai, authorities in Jilin
and Anhui are dealing with about a dozen others.
Han said all of the suspects had been involved in influence
peddling and bribery.
"They did not simply get out of the line," Han was quoted as
saying.
"They abused power for their own gain, sought bribes and
received bribes."
In July, investigators discovered that 3.45 billion yuan had
been misappropriated from Shanghai's social security fund, which is
meant to cover a population of 12 million people, for illegal loans
and investment.
A company operated by the municipal labor and social security
bureau illegally lent the money to Shanghai Feidian Investment
Development Co Ltd, a company controlled by business tycoon Zhang
Rongkun, who ranked No 16 on the Forbes China Rich List in 2005.
Zhang was the first person arrested in the scandal, which
eventually ensnared Shanghai's former Party chief, Chen
Liangyu.
For his role in the scandal, Chen, 59, became the highest level
Party official to be sacked in more than a decade.
Shanghai set up a work panel to help central government
investigators track down the misused funds. By the middle of last
month, Shanghai had successfully recovered 3.7 billion yuan ($476
million), including interest, Han said in his government work
report on Sunday.
Han also gave a brief account of the arrest of the real estate
tycoon Zhou Zhengyi, who had been involved in bribery and the
forgery of VAT receipts.
Zhou was the 11th richest person in the country, according to
the Forbes 2002 list. He had previously been arrested in September
2003 for fraud and manipulating the stock market and was released
in May 2006.
However, while investigating the pension fund scandal,
prosecutors discovered that Zhou might have been involved in
bribery relating to the case, the Shanghai Municipal Prosecutors'
Office announced in January. Zhou was detained in October 2006.
Investigators discovered that Shanghai Nongkai Development Group
had forged VAT receipts for large amounts of money at Zhou's order.
Zhou was the group's chairman.
(China Daily February 1, 2007)