3 held over official's property scandal

Updated: 2013-01-18 09:47


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ZHENGZHOU - Three people have been detained on suspicions that they were accomplices to an official who owned dozens of homes in Central China's Henan province, procuratorial authorities said Thursday.

The three people are all from the real estate industry and are suspected of being involved in the embezzlement of public funds. They were taken into custody by the Zhengzhou Municipal People's Procuratorate, after Zhai Zhenfeng, the former director of the housing administration bureau in the city's Erqi district, was arrested Monday on suspicions that he leveraged his post toward illegal ends.

Wang Bochang, board chairman of Henan Province Road and Bridge Construction Co, Ltd, was detained late Tuesday. He is suspected of embezzling 30 million yuan ($4.8 million) of public funds, according to the task force responsible for investigating the case.

The other two -- Guo Sixi, the manager of Yalong Real Estate Company, and Feng Songwei, an accountant for Dehua Pedestrian Street Management Co -- were detained on suspicions of embezzling a combined 7 million yuan of public funds. Both companies belong to the housing administration bureau of Erqi District.

Cai Diantao, who was general manager of Yitong Real Estate Development Co, Ltd from early 2009 to September 2012, is also under investigation. Lu Shuping, Zhai's wife, is the company's legal representative.

Cai said in the initial investigation that he made 300,000 yuan in profits from re-selling over 20 homes.

From 2005 to 2009, Cai was general manager of Henan Lanting Real Estate Development Co., Ltd, of which several of Zhai's relatives are shareholders.

Zhai's family owns 24 homes, though at one point, they owned 31 homes before selling seven of them, according to the task force.

Zhai's case was exposed after a whistle-blower used his microblog account on December 26 to accuse Zhai of engaging in corruption for personal gain.

The microblog also said Zhai's daughter owns 11 affordable housing units and she has two residence permits, even though individuals are only allowed one residence permit in China.

However, the task force said its investigation showed that none of Zhai's 24 homes were classified as "affordable housing."

The local public security department found that both Zhai and his immediate family members, including his wife, son and daughter, have two residence permits each, according to earlier reports.

More details about the case are forthcoming, said an official with the task force.

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