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Senior Rail Official Held on Suspicion of Corruption in Coal-Rich Shanxi

By Lu Bingyang and Song Shiqing
Yang Shaoqing, former head of the rail bureau in Taiyuan, Shanxi province, was taken into custody in mid-April on suspicion of corruption, sources say. Photo: IC
Yang Shaoqing, former head of the rail bureau in Taiyuan, Shanxi province, was taken into custody in mid-April on suspicion of corruption, sources say. Photo: IC

Chinese prosecutors have taken away a senior rail official in China’s coal-rich Shanxi province on suspicion of corruption, several unnamed sources related to China’s national railway operator confirmed to Caixin on Friday.

Yang Shaoqing, former head of the rail bureau in the city of Taiyuan, was taken into custody in mid-April following his removal by the local legislature from his post as delegate of the 12th National People’s Congress in March, sources close to the China Railway Corp. and its Taiyuan bureau said.

Early in July 2015, Yang was sacked as head of the Taiyuan rail bureau, China’s largest rail bureau by cargo volume. The reason given for his dismissal was that all of his team members were found to have larger office spaces than permitted, according to an announcement published by the Central Commission for Discipline Inspection (CCDI), the nation’s top anti-graft watchdog.

In August 2015, Yang also resigned as chairman of Daqin Railway Co. Ltd., a state-owned transportation firm controlled by the Taiyuan railway bureau, the company announced in a bourse filing without explaining the reason.

Shanghai-listed Daqin Railway handles about one-third of China’s total railway-transported coal and one-sixth of the country’s railway cargo volume, according to its official website.

The sources also said that Yang acted “arbitrarily” when he was in the Taiyuan rail bureau. He helped a little-known private train-maker win a bidding war against state-owned rail giants to secure a $1 billion deal in 2012 with the now-defunct Ministry of Railways, which was replaced in part by China Railway Corp.

After Jinan Oriental Emerging Co. won the deal, some train-makers complained that Yang used his authority to interfere with the bidding process. Competing bidders China South Locomotive & Rolling Stock Corp. Ltd. and China CNR Corp. Ltd. even refused to sell core components to Jinan Oriental Emerging to express their dissatisfaction.

A sweeping anti-graft initiative that began in late 2012 took down 15,450 officials and 45 city-level officials in Shanxi province by 2014. Most of them were in charge of distributing Shanxi’s coal resources, the official English-language newspaper China Daily reported.

The central government has put pressure on the rail bureau of Taiyuan, the provincial capital, to crack down on graft, after a CCDI inspection team criticized it as 2015’s “worst-hit area” — a euphemism for “most corrupt.” Three top management officials in the bureau were removed from their posts that year.

Contact reporter Song Shiqing (shiqingsong@caixin.com)

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