From Anhuinews.com, translated by CDT:
Newly appointed Baoshan District governor Qin Yu of Shanghai is being investigated for “serious violation of discipline,” for cases related to fallen chief of Shanghai’s labor and social security bureau Zhu Junyi. Two other officials, with the city’s electricity authorities, were also reported by the city party branch’s discipline inspection committee to have something to do with Zhu.
Unlike previous small graft cases involving social security funds in the tune of hundreds of millions of yuan, this Shanghai case involved more than 100 million yuan, which were “invested” in high-risk loans, lendings and other investments.
According to public reports, Shanghai municipal government has long been in a dual role of administrator of social security funds and also investment manager of these funds. Before Zhu’s case came to light, there were only mild warnings like “risk alerts.” Zhu’s constant losses in investing and red inks had gone on for eight years playing with more than 100 million yuan of Shanghai citizens’ lifeline. These funds were poured into real estate, public companies and private companies, demonstrating Zhu’s individual power and the energy of the interest group around him.
Zhu’s case can convince us to believe that the estimate of 16 billion yuan misused funds of social security over the past seven years is only a conservative figure.
As of end of last year, the gross value of China’s social security funds was 1.8 trillion yuan, or 10% of national GDP.
In a recent discipline inspection meeting within the social security system reported a list of fund misusing cases, involving millions or tens of millions of yuan each. But these are only a tip of the iceberg and many larger cases are just astonishing. On the surface, these cases speak of the lack of management, but the root cause is a blurred ownership and weak monitoring. [Full Text in Chinese]
Also see Radio Free Asia’s report in Chinese and audio clip
