By on April 12, 2013

More than 100 senior managers of China’s FAW have been questioned and some have been detained over and unfolding scandal that involves more than 10 billion yuan ($1.61 billion) in assets that went missing.

According to a report in the South China Morning Post, Communist Party investigators are looking into missing company assets that had been embezzled over an undisclosed period.

Some department of the State-owned, Changchun-based carmaker have seen all of their top directors probed, Global Times reports.

“The staff is really in a panic now,” an FAW senior manager told the paper. “Heaven knows who’s next.”

Zhou Yongjiang, a deputy chief economist at FAW, and other managers have been placed under shuanggui (loosely translated as “double punishment”),  in which party members can be detained and punished both in criminal and party proceedings. Zhou was allegedly involved in irregular real estate deals.

Reports also says that Zhu Yanfeng, a 52-year-old former president of FAW, was under investigation by the Central Commission for Discipline Inspection (CCDI) in connection with the missing assets. Zhu worked at FAW for nearly 25 years prior to his promotion to deputy party secretary of Jilin province.

In 2012, Jing Guosong, vice-president of FAW-Volkswagen, was probed for engaging in unauthorized transactions for personal gain between 2007 and 2010, when the sales of 170 new cars were not registered properly.

The case of FAW’s missing assets emerged in 2011 when the group was audited in preparation for a public listing.

Chinacartimes reports that “the Party has been sending investigators into FAW on a regular basis.”

Owned by China’s central government, FAW is joint venture partner of Toyota and Volkswagen, the world’s largest and third-largest automakers.

The Chinese government is taking an increasingly tough stand against formerly rampant bribery and embezzlement.

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21 Comments on “Cabal Of Chinese Managers Embezzles Billions...”

  • avatar

    In spite of all China’s prowess, it’s this endemic corruption that gives me hope.

    I don’t believe they will ever shake this any more than a rich rapper can escape the ghetto.

    • 0 avatar

      Absolute power corrupts absolutely.

    • 0 avatar

      Corruption has been part of Chinese culture for 5,000 years. Its existence didn’t deter several great dynasties from developing. I’ve been told, tongue in cheek, that corruption is the entrepreneurial spirit, improperly channeled. If that’s true, don’t stop worrying.

    • 0 avatar

      Let’s not forget China’s embezzlement of the majority of America’s industrial base.

      We buy GARBAGE from China and they keep coming up with newer and better garbage. Keurigs, smartphones, electric grills, the list goes on and on. If it breaks JUST BUY MORE!!! BUY IT AGAIN!.

      Your entire existence as an American is to take on as much debt as possible without capsizing. Your children will be born with an implicit mortgage on their heads of $60,000. Meanwhile, you won’t be safe here because crime will only go up as we fail to keep our lowest end workers working.

      Remember what Detroit was like BEFORE the outsourcing to Mexico and Asia?

    • 0 avatar

      Corruption runs rampant in China but speaking globally it’s only middle of the pack and it’s one of the few places where things are actually improving. It’s still accepted as a normal part of life unfortunately but still, maybe after busting more idiots things will eventually change.

  • avatar

    All things considered, I think I’d be better off getting stopped for doing 130 in Dubai.

  • avatar
    Gardiner Westbound

    Termination with extreme prejudice: A bullet behind the ear.

  • avatar

    I wonder who they didn’t pay off. It’s surprising that VW didn’t catch this. Will this make VW take a closer look at SAIC too?

  • avatar

    China made gunpowder for fireworks on Independence Day and ah well guns.. Purge of old party member support? Communist China big on public denunciation – Wall Street could learn.

  • avatar

    Nothing new here, business as usual in China. Considering how high up these people are, I suspect this has as much to do with political fall out from the recent leadership change as anything else.

    ie.. cleaning house making room for the next group of embezzlers.

    As for VW and Toyota, I’m sure they were getting paid their part of the deal properly etc. It probably was all from the FAW side where the funds were embezzled.

  • avatar

    So shuanggui is the Chinese version of double secret probation? Nice.

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