China arrests chairman of world's largest tin producer over bribes

Reuters

BEIJING, Oct 9 (Reuters) - Chinese authorities have arrestedand charged the chairman of the world's largest producer ofrefined tin, Yunnan Tin Co, for accepting bribes, aprovincial government said, in the latest example of thecountry's crackdown on graft.

President Xi Jinping has made fighting corruption a keyplank of his new administration, saying the problem is so severeit could affect the ruling Communist Party's survival.

Yunnan Tin chairman Lei Yi had been charged with taking 20million yuan ($3.27 million) in bribes from four people, theYunnan government said on one of its official websites,including from the chairman of a company called LeedInternational Education Group in which Goldman Sachs hasa stake. Goldman Sachs declined to comment.

The Yunnan government website said Lei had taken money fromLeed's chairman Li Hongtao to help smooth the way for Leed tobuy Yunnan Tin's 45 percent stake in a private college whichboth companies had set up in 2009. The tin company is based inthe southwestern province of Yunnan.

The website report made no mention of Goldman Sachs, sayingsimply that Leed was co-founded by a "foreign investment group".

A person familiar with the matter said that Goldman Sachs'private equity arm signed an agreement with Li in 2008, in adeal worth under $70 million that ultimately formed Leed.

An official at Yunnan Tin said the company had not receivedany legal documents about Lei's case and the company was stilltrying to confirm the details.

For now, Lei was still chairman and the legal representativefor the company, the official said, adding that production andsales had not been affected.

Yunnan Tin said on July 6 that Lei's corporate duties hadbeen assumed by a deputy as Lei was under investigation for"serious discipline violations", a phrase normally used todescribe corruption.

An executive at Leed's public relations department inBeijing, who gave her family name as Wang, said the educationcompany would not comment on the matter and was unable toprovide contact details for Li.

Yunnan Tin had output of around 70,000 tonnes of refined tinlast year, nearly double the number 2 producer, MalaysiaSmelting Corp Bhd.

Chinese authorities have announced the investigation orarrest of a handful of senior officials this year, and probeshave begun to reach into powerful state-owned industries.

Among them, former executives from oil giant PetroChina are being investigated in what appears tobe the biggest graft probe into a state-run firm in years.

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