China's former manager sells state assets for personal profit

China's anti-corruption authorities have publicized a corruption case concerning a former state firm chief, who allegedly sold state assets for personal gain.

Gong Mingcheng, former general manager of Dalian Beiliang Co. Ltd. under China National Cereals, Oils and Foodstuffs Corp. (COFCO), caused state asset losses of "hundreds of millions of yuan" through illegally selling shares and state property, the Central Commission for Discipline Inspection (CCDI) said Wednesday in a statement.

The CCDI launched an inspection targeting COFCO at the end of March last year, which led to the exposure of Gong's case.

Liaoning Provincial People's Procuratorate accused Gong of misappropriation of public funds in October and filed an investigation.

Gong was the deputy mayor of Dalian from 1983 to 1992.

In July 2004, then general manager, Gong forged the signatures of board members and sold 67 percent of shares in Beiliang Group Co. Ltd., a wholly-owned subsidiary of Dalian Beiliang, far below the market price, the statement said.

In September the same year, Gong sold a package of land, oil depots and docks that belonged to Dalian Beiliang to the already-independent Beiliang Group without an audit or board approval.

Gong even manipulated the company into lending 564 million yuan (about 92 million U.S. dollars) to Beiliang Group so that it could purchase these state assets.

The loan has never been settled.

According to current Dalian Beiliang general manager Meng Fanjie, the Beiliang Group still owns Dalian Beiliang 330 million yuan as of March 2014.

The managers of Beiliang Group, including Gong, resold state properties purchased from Dalian Beiliang to others at a much higher price, reaping huge profits.

Further, while serving as general manager of the Beiliang Group, Gong collected "salaries" totalling 5.26 million yuan, according to the statement.

"Gong subtly transferred state resources to a private company where he himself held a post. This is swindling of public funds and caused great losses," inspection official Zhu Baocheng said.

Dalian Beiliang took a huge hit from the "massive bleeding", resulting in its downturn, the statement said.

Inspection authorities said they had helped Dalian Beiliang recover state assets worth 240 million yuan since December.

In order to collect evidence of Gong's suspected crimes, inspection authorities went to about 200 government organs and 50 companies to review documents and accounts.

They also "controlled" eight people involved in the case and contacted sources that had retired from Gong's company as well as others that had fled abroad.

"The evidence is sufficient," the statement said.

The inspection authority also invited ex-staff of the COFCO's disciplinary machine to "persuade and educate" Gong into pleading guilty.

Gong finally confessed and personally handed over the company's accounts. He also proposed three plans to recover economic losses caused by him, the statement said.

"I'm willing to try hard, to do my best to reduce the losses under the supervision of the inspection team [...] I hope I will be given an opportunity to redeem my fault by making contributions [to the recovery of state assets]."