A former vice-governor of Guangdong Province was recently found to have abused his power for his son's personal gain. It caused the loss of 160 million (US$20.5 million) in state-owned assets.

Liu Weiming, 69, who was vice-governor from 1988 to 1998, was deprived of his membership to the 10th Session National People's Congress (NPC) on January 22 for "serious breach of discipline", according to a report by Xinhua News Agency yesterday.

He had previously been expelled from the Party and removed from his post as an executive vice-chairman of Guangdong CPPCC (the Chinese People's Political Consultative Conference), the report said.

His abuse of power started in 1992 when his son, Liu Jianzhong, showed interest in a plot of land in Luohu District of Shenzhen, a Guangdong city bordering Hong Kong, according to a statement by the standing committee of the Guangdong NPC.

The plot at No 10 Yangsheng Street attracted more than 10 bidders, including real estate developers and state-owned enterprises, because of its location in the commercial area of the city.

However, with the help of his father, who was in charge of industry, commerce and trade in Guangdong at that time, Liu's bid was judged the winning one. He formed a joint venture with a government-back Shenzhen company in February 1993 to start a project.

Both sides would hold a 50 percent stake with a registered capital of 15 million yuan (US$1.9 million), but Liu's company would receive 65 percent of the profits.

From 1993 to 2001, Liu Weiming hinted to officials of the Shenzhen government and Luohu District that they should reduce the land cost by 8.36 million yuan (US$1.07 million) for his son.

The Shenzhen land authorities waived a 53.35 million yuan (US$6.8 million) late fee and interest.

The decisions allowed Liu's son to pay 61.71 million yuan (US$7.9 million) less than the actual price of the land, according to the statement.

Liu Weiming also asked the Guangdong Grains Group, a state-owned company, to invest a total of 99.42 million yuan (US$12.7 million) in his son's joint venture company.

However, about 98.4 million yuan (US$12.6 million) of the investment could not be returned when Liu Weiming's case was exposed.

After seven years in operation, Liu Jianzhong's joint venture showed total assets amounted to almost zero from the registered 15 million yuan (US$1.92 million).

The company said its products were not saleable and it was unable to pay its debts.

According to a Beijing-based newspaper Democracy and Law, several other state-owned companies might have also invested in Liu Jianzhong's commercial project.

Liu Jianzhong appeared in court in February for bribing two employees of the Shenzhen Grains Co, a subsidiary of Guangdong Grains Group, with 1 million yuan (US$128,205).

(China Daily May 23, 2007)