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| Social Security Fund Scandal Hits China Again |
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Huang Genshou, director of the Jinhua Labor and Social Security Bureau in Jinhua, Zhejiang Province, is under investigation for involvement in a 100 million yuan embezzlement scandal, it was reported on Monday. The provincial discipline inspection commission is leading the ongoing investigation. According to an anonymous official with the Zhejiang Labor and Social Security Department, Huang played the stock market with the embezzled funds. An official with the Jinhua Discipline Inspection Commission confirmed that Huang is being held to assist the investigation, but that no conclusions had yet been drawn. Another insider implied some higher-ranking officials are also implicated in the case. Local officials said nothing about the scandal and had no idea about the ongoing investigation involving Huang. In another development, it has been confirmed that Lu Fulu, former Jinhua deputy executive mayor, who resigned from office in November, is also under investigation concerning the misappropriation of funds. During his tenure, Lu, who was in charge of the city's social security and finance, was assigned to head Golden Trust Securities. According to the Zhejiang Labor and Social Security Department, the amount taken from Jinhua's social security coffers was found to match the amount Golden Trust Securities used to play the stock market. At the end of 2005, Golden Trust Securities was ordered to suspend business for illegal operations and heavy economic losses. "The suspension of Golden Trust led to the discovery of the social security fund embezzlement," said an official inspecting the matter. A recent audit report found that around 7.1 billion yuan (US$900 million) of the country's two trillion yuan (US$253 billion) social security fund has been misappropriated. The misuse of social security funds has come under intense scrutiny this year. In September, a Shanghai scandal, involving 3.2-billion-yuan in city fund loans being misused, brought down Chen Liangyu, Shanghai Party Secretary and member of the Political Bureau of the Chinese Communist Party Central Committee. The state council has consistently warned social security fund administrators against risky investments that might jeopardize the safety of the funds. "In terms of managing social security funds, safety always comes before increasing the value," said Tian Chengping, Minister of Labor and Social Security, while addressing Chinese Academy of Science graduate students in Beijing. (Chinadaily.com.cn November 27, 2006) |
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