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Shanghai Electric Group official investigated for graft
SHANGHAI, Aug 9 (AFP) Aug 09, 2006
A senior official at China's Shanghai Electric Group is under criminal investigation for corruption, city authorities said Wednesday.

A city government spokesman confirmed that Han Guozhang, 57, an executive director in the Hong Kong-listed firm, was under investigation for alleged financial crimes but declined to specify the accusations.

"He's being investigated over suspicions that he's seriously violated financial discipline," said spokesman Yu Tian.

Li Chung Kwong, joint company secretary for Shanghai Electric, China's largest maker of power equipment, confirmed the investigation but said it "has nothing to do with our business or assets."

Trading in the company's shares was suspended in Hong Kong Tuesday ahead of the "clarification of certain price-sensitive information," a statement to the exchange said.

At the close of trade Monday the shares were at 2.85 Hong Kong dollars, 0.37 lower.

Han was detained on August 1 and was under investigation by the Communist Party's Central Disciplinary Committee, according to a release from the Center for Human Rights and Democracy.

The Hong Kong-based center quoted a source as saying that Han had misappropriated funds from the company's insurance plan.

It also said Shanghai Electric non-executive director Zhang Rongkun had been placed under house arrest on July 17 for borrowing 3.2 billion yuan (400 million dollars) from the Shanghai labour and social security bureau.

The money was to build a highway between Shanghai and neighbouring Hangzhou city. As a non-executive director, Zhang was not a company employee.

Han's case follows a probe last month into financial wrongdoing by another senior Shanghai official, Zhu Junyi, head of the city's bureau of labor and social security.

President Hu Jintao, who is also Communist Party chief, said in June that the government must fight to stamp out "rampant" corruption in official ranks.

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