The Lianshan District People's Court in Liaoning Province's Huludao City sentenced the former director of the district's labor and social security bureau, identified by his surname Fu, to three years in prison, with a reprieve of five years, a Liaoning-based newspaper reported yesterday.

The court found Fu, 58, assigned one of his subordinates to sign a contract with a trust and investment company in April 2003 when he was in the post of the bureau director.

Without authorization, Fu entrusted the company to invest 1.5 million yuan from the district's pension fund for farmers in government bonds. Then, he signed two other deals with the company in July 2003.

On July 2, he ordered a subordinate to sign a contract, letting the company invest two million yuan from the pension fund in government bonds.

In the contract on July 18, the company was entrusted to invest and manage another eight million yuan from the pension fund.

The court found most of the money in the three contracts was finally used to buy stocks, and the investment resulted in a loss totaling more than six million yuan.

China is being plagued by a series of scandals relating to misuse of social security funds.

The National Audit Office said last month it had uncovered a cumulative 7.1 billion yuan in misused social security funds and noted that some of the money may not be recoverable.