China arrests chairman of world's largest tin producer for 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 chairman Li Hongtao to help smooth the way for Leed to buyYunnan Tin's 45 percent stake in a private college which bothcompanies had set up in 2009. The tin company is based in thesouthwestern 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.

Yunnan Tin, in a statement to the Shenzhen stock exchangewhere the company is listed, said it was aware of Lei's arrest.The firm's vice chairman would take over Lei's duties and thecompany was operating normally, it added.

The company had said on July 6 that Lei was underinvestigation for "serious discipline violations", a phrasenormally used to describe corruption. It was unclear if Lei hada lawyer.

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.

Jin Zhong, a political commentator and editor of HongKong-based Open Magazine, said the Communist Party under XiJinping was trying to win public support by being aggressive intaking aim at corruption.

"Investigating corruption cases is a way for the leadershipto establish popular trust," he said.

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