Mills' managers fall in anti-corruption drive

A worker processes products at a company under the Dalian-based Northeast Special Steel Group. [Photo/China Daily]

Moves by the Chinese government to raise the steel industry's competitiveness by wiping out corruption have brought several senior officials under investigation.

Shi Xiongliang, former deputy general manager of Ma'anshan Iron & Steel Co Ltd, was recently charged with bribery in Anhui province. He was accused of accepting 1.9 million yuan ($310,000) from material suppliers and dealers in exchange for business.

"For steel firms, the procurement and sales departments are fertile breeding grounds for corruption," said Wei Zengmin, an analyst at Shanghai-based industry consultancy mysteel.com. He said it is common knowledge that kickbacks are available through purchasing departments.

Shi, 62, began working at Ma Steel in 1997, when the domestic steel output was far short of the nation's surging demand. He became deputy general manager in 2011 and retired in July 2013. About one year after his retirement, the Yingjiang district prosecutor's office of Anqing city in Anhui indicted Shi for bribery.

He is not alone in the industry: Four other senior officials from large mills have been detained by investigators just this year.

・Feng Jie, chairman of Jiuquan Iron & Steel (Group) Co Ltd in Gansu province, was placed under investigation for "serious disciplinary violations" on May 7, authorities announced.

・Wang Guoming, deputy general manager of Shandong Iron and Steel Group Co Ltd, was placed under investigation for "financial problems", the company said on May 6.

・Sun Wendong, deputy general manager of Wuhan Iron and Steel Co Ltd in Hubei province, was detained on suspicion of accepting bribes, the listed company said in a statement to the Shanghai Stock Exchange in April. Sun began working at Wuhan Iron in 1997 and served as an assistant to the general manager of Wuhan Iron and Steel's parent company, Wuhan Iron and Steel (Group) Corp.

・Cui Jian, vice-president of Baosteel Group, the parent of the listed Shanghai Baosteel Group Corp, is being investigated for "serious disciplinary violations", officials said.

"In addition to oil giants such as PetroChina Group and Sinopec Group, the State-owned steel companies are also one of the areas that have been targeted by the anti-corruption campaign since President Xi Jinping's presidency," said Mi Pengqi, a senior analyst at JYD Online Corp, a Beijing-based bulk-commodity consultancy.

Investigation into the steel sector's problems began in December 2013, when Liang Jingli, former president of the State-owned Guangxi Liuzhou Iron and Steel Group, was put under investigation.

Three months later, he was expelled from the Communist Party of China and removed from his position for corruption.

"Corruption is a systemic problem that will require a long time to solve," said Mi. He said that probes into corruption will benefit the companies' managers and finances.

"Compared with foreign producers, Chinese State-owned steel companies are less profitable and less competitive in the world market. The government wants to improve the situation by various means, including anti-corruption efforts," he said.