Loudi Daxin Trading Co
|Loudi Daxin Trading Co|
Loudi Daxin Trading Co., Ltd. is said to be "the legal representative of the Ministry of Fuel LIANGANG's former party secretary Wang Jianwen's brother", involved in purchasing steel,steel processing and distribution within China.
In mid-2011, the company was indicted for its connection with state-owned Valin Steel (in which Wang himself is an equity holder) which enabled it to illicitly win processing and transport contracts from the latter company [Disassembling a Steel Giant, Caixin, 1 July 2011].
Caixin press, an uncharacteristically strident voice within mainland China, has desribed how Loudi Daxin and top executives of Valin Steel itself "picked away" the steel "behemoth" in "years of insider deals" which "left the company dangling off a cliff".
According to Caixin:
"Established in 1958, Valin Steel now produces more than 8 million tons of steel annually, with total assets worth 37.8 billion yuan. The company also boasts 15,900 employees and booked 31.6 billion yuan in revenue last year. But in 2010, its losses stood at a hefty 2 billion yuan.
But when, finally" an investigation was made into Valin's operations,"a curtain was pulled on corruption".
"A total of six senior management members and seven middle-management personnel were removed from Valin Steel for their involvement in insider transactions. More than 100 junior management staffers were also found to have been involved in inside transactions.
Goes on Caixin: "Much of the shady deals involved favors for family members. Valin Steel Deputy General Manager Liu Jishen’s brother-in-law Liu Chun supplied sulfuric acid to Valin Steel through Loudi City Dechun Industry and Trade Co. Another relative of Liu Jishen – his brother-in-law Duan Yongzhong – was also found to have done business with Valin Steel.
As well as Loudi-Daxin, "Valin Steel Deputy General Manager Wu Xinping’s younger sister, cousins and brother-in-law all supplied various part materials and raw coal to Valin Steel. These relatives either owned related companies that did business with Valin Steel or held major positions in these companies.
"From the top to junior management, a large number of Valin Steel executives tried to profit from the company and hollow out state assets. In many of these transactions, procurement reports were faked to overstate the quantity and prices of goods purchased from suppliers" [Caixin ibid']