Chairman of Chinese State-Owned Machinery Giant Sacked for Graft

Chairman of Chinese State-Owned Machinery Giant Sacked for Graft
Employees work on a drilling machine production line at a factory in Hebei Province, China, on Nov. 14, 2018. (STR/AFP/Getty Images)

The chairman of China Hi-Tech Group Corporation, a state-owned conglomerate with portfolios in machinery, textiles, and real estate, has been expelled from the Chinese Communist Party and charged with graft crimes.

China Hi-Tech is ranked first in the country for manufacturing industrial machinery, equipment, and parts. Zhang Jie, who now faces court prosecution, rose to the top executive position at the company after joining the ranks in June 2004.

In an April 15 statement, the Party’s anti-corruption watchdog, the Central Commission for Discipline Inspection (CCDI), explained that its investigation into Zhang started in October 2018. The authorities’ list of Zhang’s charges is long: owning shares in nonlisted companies, in violation of Chinese business laws; engaging in ‘money-for-sex’ transactions; accepting bribery gifts and invitations from business partners to play golf; seeking benefits for others; engaging in “superstitious activities”; and resisting the investigation, among others.

Zhang is one of the most senior executives in state-owned enterprises to fall amid the Chinese regime’s sweeping anti-corruption campaign, which began in 2012 shortly after current Party leader Xi Jinping took power.

Presently, China Hi-Tech’s total assets exceed 90 billion yuan ($13 billion). The company has more than 46,000 employees and holds full ownership or majority control of 24 subsidiary companies. It also holds stakes in three listed companies.

These subsidiaries are located in more than 20 provinces, municipalities, and regions across China, with a presence in nearly 20 countries.

Providing Funding to Company Owned by Mistress

According to an April 15 report by Chinese news portal Sohu, in recent years, China Hi-Tech employees have reported Zhang to Party authorities for improper or illegal conduct many times.

But he was not investigated until an employee submitted a letter to the CCDI in October 2018 using his real name, accusing Zhang of funneling funds from one of China Hi-Tech’s subsidiaries, Hang Tang Wealth Management, to a separate company. This company is associated with a woman surnamed Wang, who has a close relationship with Zhang.

The CCDI then took on the case. Through interrogation, the woman surnamed Wang admitted that she was Zhang’s mistress and that she was the actual owner of the company receiving funds from Hang Tang Wealth Management.

‘Superstitious Activities’

The Chinese Communist Party is officially atheist and does not allow members to engage in any religious or spiritual activity.

The Sohu article gave more details about the charge that Zhang engaged in “superstitious activity.” Two years ago, Zhang hired a feng shui master to foretell his fortune and help identify a piece of land that would be considered auspicious. Zhang decided to purchase the land and planned to use it as a final resting place for his parents. Investigators found out the value of this land was as high as several million yuan.