Caixin
Apr 15, 2021 07:00 PM
BUSINESS & TECH

Trio of Top Officials at State Steel Firm Fall Under Graft Probe

Du Lujun, Kunming Iron and Steel’s chairman and Communist Party chief.
Du Lujun, Kunming Iron and Steel’s chairman and Communist Party chief.

Three top officials at the state-owned Kunming Iron and Steel Holding Co. Ltd. have fallen under corruption investigations, a provincial graft-buster in Southwest China said Wednesday.

Du Lujun, the company’s chairman and Communist Party chief, is being probed for alleged “serious violations of (party) discipline and law,” a phrase that usually indicates corruption, said the statement by Yunnan province branch of the Central Commission for Discipline Inspection (CCDI).

Li Ping, vice president and a member of the Communist Party committee, and the company’s Vice President He Zhijun, have surrendered to police amid similar allegations, according to separate statements released by Yunnan CCDI the same day.

The news comes just months after Kunming Iron and Steel was merged into steelmaking giant China Baowu Steel Group Corp. Ltd. in February. Under the deal, Baowu was given a 90% stake in the company free of charge by the Yunnan state-owned enterprise watchdog, which holds the remainder.

In a standalone Wednesday statement, the Yunnan CCDI also announced probes into 14 managers and factory-floor level employees at Kunming Iron and Steel and its subsidiaries. They include the company’s former chief economist Bai Baoan, Yunnan Cement and Building Materials Group Co. Ltd.’s Chairman Dong Yu, as well as two workers in a steel mill in Yunnan’s Honghe Hani and Yi autonomous prefecture.

Founded in 1939, Kunming Iron and Steel produced 7.12 million tons of steel in 2020. It turned a 1.74 billion yuan ($266.6 million) profit last year, up 16%, but its revenue fell 11% to 106.9 billion yuan and it had a debt-to-asset ratio of 71.3%.

Employees welcomed the merger with Baowu, hoping it would lead to improved financial performance and better salaries, a former worker told Caixin. The person also said that staff were “shocked” by the news, and added that Baowu officials have already stepped into the roles of those under investigation.

Contact reporter Lu Yutong (yutonglu@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)

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