Central Commission for Discipline Inspection Office Report: It is absolutely not allowed to put state-owned assets into "private pockets"
This is a zombie enterprise that no longer has the ability to generate blood and barely maintains itself through financial appropriations, but the amount involved in violations of discipline and law exceeds 20 million yuan.
This is a corruption case involving more than 20 party members and cadres, in which three former "top leaders" followed by "corruption", and members of the leadership and middle-level cadres acted up and down, causing serious damage to the political ecology.
State owned assets and resources are hard won and must not be embezzled or wasted by some people. Starting from July 2021, the Discipline Inspection Commission and Supervision Commission of Yangquan City, Shanxi Province, investigated and dealt with a series of corruption cases at Jinyu Iron and Steel Co., Ltd., mainly involving the three "top leaders" of Yugang, including Jing Changhe, Hao Jingquan, Li Jianhua, Du Haigui, the head of the finance department, and Zhang Xiaojing, the financial personnel.
This case once again demonstrates that once power loses its constraints and supervision, it will inevitably breed corruption. Even companies on the brink of bankruptcy should be given sufficient attention. We must resolutely prevent illegal activities such as selling state-owned assets at low prices, engaging in illegal transactions, and transferring benefits, and never allow state-owned assets to be put into private pockets.
From bottom to top, from outside to inside, the center blooms, starting from auditing accounts and reviewing accounting personnel, and conducting in-depth investigations along the line
The towering chimneys no longer emit smoke, the factories that have dismantled most of the equipment no longer roar, the bankruptcy announcement on the bulletin board has turned yellow and mottled, and the courtyard walls are covered in weeds... Not long ago, reporters arrived at the former site of Yugang, and it is hard to imagine that this place was once a landmark state-owned enterprise in the local area.
In the 1980s and 1990s, Yugang, at its peak, had assets worth 830 million yuan. However, due to various factors such as market environment, the company gradually transitioned from prosperity to decline and ceased production in December 1999. Subsequently, multiple private enterprises leased Yugang to continue production and operation, but Yugang was completely shut down in 2008. Afterwards, in accordance with the relevant policies of local extremely poor enterprises, Yangquan City allocated daily operating funds of 4 million yuan to Yugang every year to monitor the company's production equipment and ensure the basic living of employees.
This zombie enterprise, which has lost its production and operation functions, has not been peaceful in recent years. Employees have petitioned multiple times, reflecting issues such as corruption among members of the Yu Steel team and damage to their interests. The Yangquan Municipal Party Committee attaches great importance to this and requires the Municipal Commission for Discipline Inspection and Supervision to "quickly investigate and strictly punish, resolve at the source, and safeguard the vital interests of employees.".
"From bottom to top, from outside to inside, the center blooms." Han Shufang, a member of the Standing Committee for Discipline Inspection and Supervision of Yangquan City, and the leader of the Yugang series corruption case investigation team, summarized the investigation and handling ideas of the case in three words.
"After understanding, we found that the problems reported by the petitioners were relatively general and lacked specific clues to be investigated, leaving us at a loss for a moment." Zhao Bo, a cadre of the Discipline Inspection and Supervision Group of the Yangquan Municipal Commission for Discipline Inspection and Supervision stationed at the Municipal State owned Assets Supervision and Administration Commission, explained that after analysis and judgment, the special task force decided to start with auditing accounts and reviewing accounting personnel, and thoroughly investigate along the line, which finally uncovered the lid of the Yugang corruption case.
"For Yugang, which is on the brink of bankruptcy, the annual financial allocation of 4 million yuan is the biggest source of income, and problems are mostly related to this fund." Zhao Bo said that after careful verification, it was found that the financial accounts and bank statements were clearly inconsistent. Zhang Xiaojing, the financial cashier of the bankruptcy liquidation team of Yugang at the time, was heavily suspected and became the first subject of detention in this case.
According to the investigators, Yu Gang illegally deposited the withdrawal funds from the public account and the pension insurance premiums paid by the contracted farmers in Zhang Xiaojing's personal bank account.
In order to make money, starting from early 2017, I used the time difference of one in one out to misappropriate public funds to purchase funds and wealth management products, and lent them to others to earn interest. In just four years, Zhang Xiaojing misappropriated public funds totaling over 9.97 million yuan.
Follow the vine to find the melon. The investigation into Zhang Xiaojing revealed clues to the disciplinary and illegal issues of Du Haigui, the head of the finance department. After investigation, Du Haigui took advantage of his position to embezzle more than 2.34 million yuan of public funds and 1.2126 million yuan of state-owned funds. The investigation of Du Haigui led to the emergence of Li Jianhua, Hao Jingquan, and Jing Changhe, the three top leaders of Yu Gang, one by one.
Behind the repeated misappropriation, extravagance, indulgence, and power and money transactions of traveling, eating, greed, and exchange, lies a disregard for the interests of employees
"I didn't change Yugang, but money changed me." In October 2008, Jing Changhe, then Chairman of the State owned Enterprise Supervisory Board of the State owned Assets Supervision and Administration Commission of Yangquan City, took office at Yugang. He once wanted to make a difference, but seeing no hope of recovery, he decided to indulge in pleasure. What has a worse impact is that its disciplinary and illegal behavior has seriously damaged the political ecology of Yugang. The investigators summarized the extravagant and indulgent behavior of Yu Gang's leading cadres, who relied on enterprises to eat, into four words: travel, eating, greed, and exchange.
From Mohe in the north to Sanya in the south, during his eight years as the leader of Yugang, Jingchanghe led his team members and middle-level cadres to visit scenic spots and historical sites in 51 cities and counties across 18 provinces and regions in China. From December 16th to 23rd, 2013, Jing Changhe led a group of six people, including Li Jianhua and Hao Jingquan, who were then deputy general managers of Yugang, to a company in Weifang, Shandong Province to collect outstanding debts. They took the opportunity to detour to Yantai, Jinan, Jiangsu Nanjing, Huai'an, Zhenjiang, Yangzhou, Lianyungang, and other places for sightseeing, spending more than 16000 yuan in public funds for eight days.
"From 2008 to 2016, Yu Gang's public funds for food and drink reached an astonishing level." Hao Jingquan recalled in his confession, "Almost all the restaurants and private kitchens in Yangquan have left the footprints of Yu Gang's leaders."
Have a meeting, eat a meal, do something, and eat a meal; Two or three clients come for consultation, and seven or eight people are also needed to join the table; Acquaintances and friends have arrived, and it is also a public funded entertainment. After the introduction of the central eight point regulation, people switched from large restaurants to private restaurants even though they couldn't eat or drink anymore; Despite being afraid of reimbursement, Jing Changhe arranged for Du Haigui to transfer the public funds to his personal bank account for use, citing the need for business expenses.
"As the longest serving 'leader' among the personnel involved in the case, Jing Changhe almost regards the company's' life-saving money 'as his own money." Zhao Jin, Deputy Director of the Fourth Supervision and Inspection Office of the Yangquan Municipal Commission for Discipline Inspection and Supervision, introduced that Jing Changhe has arranged for Du Haigui to transfer 3.695 million yuan of public funds to his personal account through transfer or cash payment hundreds of times. The largest misappropriation of funds reached 520000 yuan. Until the incident was detained, Jingchanghe still had over 930000 yuan of embezzled public funds that had not been fully repaid.
Up the line, down the line. Successors Hao Jingquan and Li Jianhua colluded and used the convenience of purchasing loaders and buses for Yugang to divide the embezzled funds equally by issuing false invoices, seriously damaging national interests. Other middle-level and above cadres have also followed suit, seeking various reasons to reimburse invoices and embezzle public funds. During Jing Changhe's tenure, Yugang generated over 5.8 million yuan in reimbursement accounts, of which, in addition to Jing Changhe's reimbursement of over 3 million yuan, over 600000 yuan was divided among 18 middle-level and above cadres. Many reimbursement vouchers are accompanied by hundreds of bills, including unregistered train tickets, fuel tickets, etc.
It is difficult for outsiders to imagine that "zombie companies" still have areas for profit. The leadership team of Yugang takes advantage of opportunities such as private enterprise leasing production, land occupation for real estate projects, and asset disposal to exchange corporate interests with private enterprise owners and developers, accepting and soliciting bribes.
From 2018 to 2020, Zhao, the legal representative of a real estate development limited company in Yuxian County, bribed a total of 250000 yuan to Hao Jingquan and Li Jianhua for their help in the relocation and renovation project of Yugang Shed. Li Jianhua explained during the review and investigation, "I feel like I have put in a lot of effort for them, and they are willing to give it. If you are willing, it is not illegal."
From June 2008 to June 2014, during the period of leasing, operation, and care management of Yugang in a certain material limited company in Yuxian, Jing Changhe repeatedly accepted and demanded bribes totaling 357000 yuan from the company owner Wang. Wang illegally transported and used machinery, equipment, raw materials, and other assets, resulting in state-owned asset losses of over a million yuan. In 2018, after receiving a benefit fee of 1 million yuan, Hao Jingquan and Li Jianhua not only helped Wang obtain a care fee of 7 million yuan as he wished, but also illegally included more than 2.59 million yuan in the salary and maintenance costs of the private enterprise management personnel, causing huge losses to state-owned assets.
Inadequate daily supervision is an important reason for the arbitrary and reckless behavior of Yu Steel from top to bottom
"From the cases investigated and dealt with, it shows a characteristic of integrating wind, corruption, and wind corruption." In January 2023, the main responsible person of the Yangquan Municipal Party Committee pointed out at the plenary session of the Municipal Commission for Discipline Inspection that Jing Changhe was irresponsible and inactive, and had spent his energy on eating, drinking, and playing. From 2009 to 2013, only about 20% of the invoices reimbursed by Jingchanghe in the company were actually used for official business.
"The state-owned assets department bears the important responsibility of preserving and increasing the value of state-owned assets, and the supervisory board of state-owned enterprises has an inescapable responsibility for the daily supervision of state-owned enterprises." Shi Xuming, a member of the Standing Committee of the Yangquan Municipal Party Committee, Secretary of the Municipal Commission for Discipline Inspection, and Director of the Supervisory Commission, said that the inadequate daily supervision of Yugang by higher-level departments such as the Municipal State owned Assets Supervision and Administration Commission is an important reason for its arbitrary and reckless behavior. Other reasons include: lack of party building and weakened party leadership; Ideological transformation, loss of ideals and beliefs; Chaotic management and ineffective rules and regulations.
Specifically, in terms of daily supervision, insufficient attention has been paid to bankrupt enterprises. From comprehensive shutdown to leasing operations, until bankruptcy, Yugang's state-owned assets have never had a clear and complete state-owned asset account; Secondly, there is a lack of daily supervision, lax year-end accounting audits, and a lack of investigation and research, supervision and inspection, as well as job performance evaluations, resulting in a plethora of problems such as long-term non entry of assets and failure to report and approve disposal; Thirdly, there is a lack of supervision over the "top leaders", with lax and inaccurate pre employment inspections, and a lack of supervision during their tenure, resulting in the appointment and deepening of the power of the three main leaders.
The weakening of Party leadership and the lack of Party building will inevitably lead enterprises to lose their direction. "I have completely detached myself from the supervision of the Party Committee, and have never actively organized Party members and middle-level cadres to study the Party Constitution and disciplinary regulations seriously. I have been confused all day long, without rules and constraints, and without disciplinary boundaries." Jing Changhe reflected. Li Jianhua said during the organizational review and investigation that in Yugang, democratic life will become mere formality, party organizations will be weak and powerless, and the role of party branches as fighting fortresses will disappear.
In Zhao Jin's view, the reason why these three "top leaders" regard Yugang as a personal consumption ATM and a place to stay but not stay, allowing others to seize state-owned assets, is because of their lack of party consciousness and loss of ideals and beliefs. "They not only harmed themselves, but also damaged the team, team, and culture, leading to the negative culture taking root in Yugang and having a very negative impact."
"The reform of state-owned enterprises must strengthen supervision and prevent the loss of state-owned assets. If this is not done well, other reforms will be difficult to achieve the expected results." Zhao Zhong, head of the discipline inspection and supervision team of Yangquan Municipal Commission for Discipline Inspection and Supervision in the State owned Assets Supervision and Administration Commission, said that Yu Gang's enterprise management system has become a wall decoration, empty words on paper, and the financial management system has been trampled on. "Yu Gang's financial accounts have become a bad debt, and internal management has become a pot of Congee".
The three "leaders" of Yu Gang all regarded financial personnel as their confidants, colluded in corruption, and financial personnel also colluded in the corrupt activities, providing funds for their extravagant eating, drinking, and public fund consumption, helping to smooth out relevant financial accounts, and attempting to conceal relevant disciplinary and illegal issues. For example, in order to avoid problems being discovered during the bankruptcy liquidation audit, Li Jianhua, Hao Jingquan, Du Haigui, and Zhang Xiaojing discussed and the finance department adopted methods such as forging creditor's rights and financial transactions to deduct more than 920000 yuan from Jing Changhe's food and beverage accounts.
In July 2022, Jing Changhe and Hao Jingquan were expelled from the Party, while Li Jianhua was expelled from the Party and held public office. In December of the same year, Jing Changhe was sentenced to ten years and nine months in prison and fined 350000 yuan for the crimes of embezzlement, embezzlement of public funds, and bribery; Li Jianhua was sentenced to three years and eight months in prison and fined 400000 yuan for committing the crimes of corruption and bribery. In January 2023, Hao Jingquan was sentenced to three years and eight months in prison and fined 200000 yuan for the crime of bribery.
Strict rules and regulations, positive atmosphere, and clean ecology
In January 2023, with the joint efforts of the municipal and county governments and relevant departments, the bankruptcy liquidation work of Yugang was basically completed. Li Yang, the head of the Enterprise Reform and Restructuring Department of the State owned Assets Supervision and Administration Commission of Yangquan City, introduced that all outstanding expenses owed to employees will be resolved, and all employees will enjoy unemployment insurance benefits in accordance with regulations.
In Li Yang's view, long-term inefficient occupation of land resources by "zombie enterprises", bankruptcy and market-oriented clearance of these enterprises, can activate existing resources and maximize the value of land. At present, all 22 "zombie enterprises" in Yangquan City have been cleared, debt of 2.6 billion yuan has been resolved, more than 2500 acres of land have been released, and approximately 500000 square meters of houses and buildings have been revitalized, playing a positive role in promoting urban construction and economic development.
"The cost cannot be paid in vain, and the lessons must be learned." The main person in charge of the State owned Assets Supervision and Administration Commission of Yangquan City said, "We must use the certainty of rules to deal with the uncertainty of risks and effectively strengthen the institutional cage."
The State owned Assets Supervision and Administration Commission of the city has established regulations and systems in cadre management, financial control, and other aspects, and has formulated and improved multiple regulations such as the "Management Regulations for Leaders of Municipal State owned Enterprises" and the "Opinions on Further Standardizing and Supervising Financial Management of Enterprises", using strict rules and regulations, maintaining a positive atmosphere, and maintaining a clean ecology. At the same time, by holding special democratic life meetings, analyzing the causes of problems, and conducting heart to heart talks with major leaders of various enterprises, we will draw lessons from each other, use cases to promote reform, and resolutely prevent such problems from occurring.
Check cash and deposits to see if the accounts match; Check income to see if it is recorded in a timely and sufficient manner; Check the expenses to see if the procedures are complete and reasonable. At the end of April 2023, the Yangquan Municipal Commission for Discipline Inspection and Supervision launched a special campaign to address prominent issues in the operation of funds in state-owned enterprises and institutions.
"Taking the Yu Gang case as a lesson, we focus on whether there is a phenomenon of 'private storage of public funds' in the various income of state-owned enterprises and institutions, various funds that should be turned over to the government, and withheld employee social insurance premiums, as well as whether there are problems such as corruption, embezzlement, and withholding of private shares in the use of funds." Wang Xuefang, director of the Fourth Supervision and Inspection Office of the Yangquan Municipal Commission for Discipline Inspection and Supervision, introduced that through self inspection, self correction, and key inspections, it is conducive to timely discovering and rectifying problems, promoting the improvement of regulatory mechanisms, and promoting the standardized management of funds in state-owned enterprises and institutions. At present, 5 people have voluntarily surrendered.
Convene a meeting to announce the punishment for serious violations of discipline and law in the Yu Steel series and report the case details. Organize the viewing of Yu Steel warning education films at the city's leadership conference and the warning education conference for leaders of state-owned enterprises. Conduct a collective integrity talk with members of the leadership team of state-owned enterprises, compile and print a confession record of typical cases of violations of discipline and law by party members and cadres of state-owned enterprises, and organize the writing of warning education experiences
Zhang Hualin, Deputy Secretary of the Discipline Inspection Commission and Deputy Director of the Supervision Commission of Yangquan City, said, "We have carried out warning education activities to encourage party members and cadres to further learn from cases, resist corruption and prevent change, and achieve the effect of promoting reform and education through cases. We have also urged the Municipal State owned Assets Supervision and Administration Commission to systematically promote the construction of governance systems and governance capabilities in response to common and individual issues reflected in cases, and achieve the goal of promoting governance through cases and governing one area. We have also encouraged relevant units to be problem oriented, continuously improve institutional mechanisms, and achieve the effect of promoting construction through cases and regulating one side."
