What will come of Caijing magazine’s latest cover story, which examines the stealth privatization of power conglomerate Luneng? Folks here are watching and whispering. Last week, Caijing reported that two newly established no-name entities, one backed by a trust fund with a mystery investor, “secretly” acquired a 91 percent share last May in the Shandong province colossus – whose assets range from coal mines to a top soccer club – without central government approvals. The article also indicated that Luneng officials may have bilked employees who sold shares at what turned out to be “grossly undervalued” assets, as well as extracted preferential treatment to broaden its business in the increasingly cutthroat power industry. The story forced Luneng to issue much-belated statements owning up to the sale. But it has denied any improprieties, challenged certain facts in the article – and done just about everything in its power to stop the expose from spreading.
At Luneng’s beckoning, Biganzi has been told, Beijing Internet authorities promptly ordered Caijing to remove the print version of the article from its Web site last week. Portals Sohu and Sina, according to Ming Po, shelved the story as well after “coming under pressure” to do so. In Shandong and Beijing, Luneng also tried to buy up the issue from newsstands, Ming Po said, echoing earlier comments of Beijing-based journalists on the mainland BBS Reporters’ Home.
Nevertheless, a few copies were still available this week at some stands in Beijing’s Central Business District. And on its site, Caijing has since posted a slightly updated version, now available to registered users only. The new version alters the identity of the person behind a letter to the State Council demanding an probe into “possible corruption” in the Luneng deal: originally the whistleblower was the standing chairman of the Investment Association of China; now it’s a top researcher in the body (who’s apparently a ex-college classmate of former premier Zhu Rongji). Caijing also uploaded an English translation of the original earlier this week. The Caijing expose, entitled “Whose Luneng?”, has been named in most every subsequent news report on the case. It has set off a new round of debate online over the privatization of key state assets and the ever-shady nature of China’s now-bullish stock market. The day after the piece emerged last week, public trading in shares of three Luneng-related companies was halted, and government regulators declared that they were investigating.