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Mine watchdog jailed in Shanxi's largest corruption scandal

By Jane Chen | June 7, 2010, Monday | Online Edition

A GOVERNMENT mining watchdog in north China's Shanxi Province has been jailed and fined for gaining 305 million yuan (US$44.65 million) from running an illegal coalmine.

Puxian County People's Court has jailed Hao Junpeng, former Party secretary and director of Puxian County Mining Bureau, for 20 years for the illegal operation and other corruption charges and fined him and his wife Yu Xiaohong 170 million yuan for tax evasion, the Xinhua news agency has reported.

Yu, former director of Puxian Civil Affairs Bureau, was jailed for 13 years for illegally buying explosives and tax evasion. Hao and Yu were kicked out of the Party and sacked.

The case is described as the largest corruption scandal in Shanxi's mining industry, Xinhua said.

At Hao's home, investigators found sale contracts priced at 170 million yuan for 35 apartments he bought across the country as well as 127 million yuan in bank savings.

Most of the money was profit from his Chengnanling Mine.

The court said Hao launched the mine in 2000 and took charge of the company's operation, with Yu handling sales and accounting.

Since China bans government officials from investment for profit, Hao got other people to buy the mining rights for 20,000 yuan and then faked documents and registered Yu's brother as the company's legal representative.

In August 2005, the central government cracked down on illegal mining and asked government workers who had invested in mines to quit their shares.

To conceal his operation, Hao signed a fake agreement to quit his shares in the mine.

As the county's chief mining official, Hao and his wife soon expanded the mine's total assets to 52.85 million yuan, with more than 500 workers.

Between 2003 to 2008, the company evaded 17.81 million yuan in taxes over transactions with 22 other companies, accounting for 82 percent of the total taxes it owed, the report said.
Hao had also misused 230,000 yuan of public funds for the mine and refused to pay back the money. He embezzled another 250,000 yuan, the court said.

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