Caixin
Feb 03, 2015 05:56 PM
PROPERTY

State-Backed Automaker 'Spent Millions to Buy Land, Build Villas'

(Beijing) – One of the country's largest automakers spent millions of yuan to buy land and build villas in the northeastern city where it has its headquarters, the Communist Party's graft buster said in notice published on its website on January 30.

State-owned China FAW Group Corp. spent 23.4 million yuan to build 131 villas, the Central Discipline Inspection Commission (CDIC) said. The land for the villas was bought in 2002 in Changchun's Jingyue District.

The notice said the company's management team did not collectively decide to buy the land and build the villas, and FAW Group has not held anyone accountable for the misused funds.

FAW Group said it investigating the problem, according to the notice. The notice does not say who lives in the villas now.

A special team from the 205-member Central Committee, the party's nexus of national power, investigated the automaker from July 29 to August 29. It informed FAW Group executives about problems it found on October 29.

The CDIC's notice also said that FAW Group executives were found to be engaging in corrupt practices in the sales sector. Company leaders illegally owned or held shares in dealerships, and some helped relatives do business with the automaker.

A person with knowledge of the matter said a company that wanted to open a dealership had to pay an executive at FAW Group a bribe of 2 million yuan.

The CDIC said in August that it was investigating three executives at FAW Group. The three – deputy general managers An Dewu and Li Wu, and Zhou Chun, deputy general manager of the Audi sales department – have all left the company.

FAW Group has joint ventures with Toyota Motor and Volkswagen Group, which owns Audi.

The prosecutors in the northeastern province of Jilin issued an arrest warrant for An to answer charges he took bribes, the country's top prosecutor's office said in January. An was later arrested.

The January 30 notice from the CDIC said that six executives and managers at an FAW Group subsidiary have been punished for using company money to take private trips abroad. The travelers repaid FAW Group 1.02 million yuan, the notice said.

The party started using the inspection teams of the type sent to FAW Group in 2003, and they have played an import role in the anti-graft campaign launched by the party's general secretary, Xi Jinping, in late 2012.

Two rounds of inspections of local governments and other entities were held last year, one in the spring and one in the summer.

(Rewritten by Guo Kai)

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