Monday, July 20, 2009
Dear Readers, apologies for my long absence. I was in China and didn't want to post anything provocative, even though there was plenty provocative that took place. Anyway, I would like to juxtapose a couple of items below. The first item is a an excellent story by the Telegraph (bravo!) on a Namibia probe into a Chinese tech firm recently run by Hu Jintao's son Hu Haifeng. The second item is a story in the People's Daily about a recent promotion ceremony in which three PLA general received promotions to full generals, including the son of Liu Shaoqi Liu Yuan. I am not at all sure that these two items are related, but clearly to ward off such attacks as a corruption probe against one's son, Hu needs ultimately the support of the army, which in recent years is purchased by promoting a group of generals to replace generals promoted by one's predecessor. It will be interesting to see if this probe continues and actually get Hu Haifeng into trouble. I think this will get interesting.....
Hu Jintao's son linked to African corruption probe
The eldest son of the Chinese president Hu Jintao faces questioning in connection with a multi-million pound corruption investigation in Namibia.
By Sebastien Berger Southern Africa Correspondent And Malcolm Moore In Shanghai
Published: 5:25PM BST 17 Jul 2009
Three people have been arrested in the country on charges of fraud, corruption and bribery involving a government contract with the state-owned Chinese company Nuctech, a world leader in scanning technology.
Hu Haifeng, 38, was the president of the firm until last year, when he was promoted to being the party secretary of Tsinghua Holdings, the group which controls Nuctech and 30 other companies.
The investigation centres on a £34 million deal Namibia signed with Nuctech to provide it with scanners for its ports and airports.
Under the deal, the Namibian government was to make a £8 million down payment, with the balance coming from a loan Beijing has provided Namibia, on condition that it is spent with Chinese companies.
But according to Namibia's Anti-Corruption Commission, within weeks of the ministry of finance making its payment to Nuctech, the company signed contracts for an identical sum with a Namibian consultancy called Teko Trading.
The money was allegedly then disbursed to Teko's co-owners, Teckla Lameck and Kongo Mokaxwa, and Yang Fan, a Chinese national described in court as Nuctech's African representative.
All three are being held in custody while the investigation continues.
The director of the Anti-Corruption Commission, Paulus Noah, said the matching sums going to and from Nuctech had raised suspicions.
"It's very strange," he said. "We are suspecting that corruption might have been involved."
He said he would like to question Nuctech's management, including Mr Hu.
"Of course if he can make himself available I will be happy," he said. "I would like to know how they do business in China."
He said Mr Hu was not a suspect at this stage and he would be interviewed as a potential witness.
It is potentially a huge embarrassment for Hu Jintao, as popular discontent with Communist Party corruption has grown in recent years – with some officials executed on conviction – but publicised cases have tended to involve local and provincial figures, rather than national ones.
His son usually keeps an extremely low profile, and has been nicknamed the "Teflon princeling" for his ability to keep out of the media.
Nuctech, previously known as Nuclear Technology Company, was spun out of Tsinghua University, the elite university often referred to as China's MIT which both Hu Jintao and his son attended.
It claims to have world-leading technology for scanning the inside of containers and has 90 per cent of the Chinese market for scanners and x-ray systems. Its machines are also used in British ports and it has held talks with the airports operator BAA, although the company will not confirm whose machines it uses for security reasons.
Hu Haifeng graduated from Tsinghua with a master's in engineering physics and joined Nuctech directly as assistant to the general manager.
Contacted for comment, a man who answered the telephone at Nuctech's Hong Kong office said: "There is no need to verify anything, and we are out doing business."
In its international business division in Beijing a woman who would not give her name would not say if it had a spokesman.
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Rich Kuslan, Editor