Graft probe targets China aviation

Aviation official found dead and two airline executives dismissed amid corruption probe.

    China's National Audit Office reports misuse of  $15.2m of funds at China Eastern-run businesses

    "This has been a terrible problem for a while," Zhang Qihuai, a law professor at the Logistics College of the Chinese Air Force, said.

    "In China, aviation is a semi-militarised industry, not a completely commercial one. It attracts huge amounts of money and power," Zhang said.

    Bribery and corruption

    The CAAC holds a virtual monopoly over everything in the business, including aircraft purchases, new air routes, airport time slots and approval of new airlines.

    "Once officials who hold those rights yield to temptation, there is huge space for bribery and corruption," Zhang said.

    The high-profile treatment by the state-controlled press of the aviation-related allegations, mainly involving suspected bribery connected with the awarding of air routes and slots at airports, suggests that more trouble is coming.

    "They're toppling like dominoes,"a headline in the newspaper China Business News, said.

    It said the investigation was targeting many other aviation officials.

    Kuang Xin, director of civil aviation affairs at the National Development and Reform Commission, the government's main planning agency, was detained for questioning into allegations he took bribesto approve airport projects, the newspaper Global Times and other reports said on Tuesday.

    Huang Dengke, CAAC's north China chief, is under investigation for allegedly peddling air routesand time slots, Caixin, a financial magazine, and other reports, said.

    'Black hole'

    Zhang Zhizhong, a former Beijing airport chief, was dismissed in March and is reportedly under investigation.

    Zhang had taken over as head of the airport from Li Peiying, who was put to death in August 2009 after the People's Supreme Court upheld his sentence in a $16m bribery and embezzlement case.

    Meanwhile, Shi Guofeng, former general manager of operations control at Shanghai-based China Eastern, is also reported to be under investigation for alleged corruption.

    Zhu Yan, an official in the airline's media office, confirmed Shi was no longer working at China Eastern, but would not comment further.

    Last week, China's National Audit Office reported finding misuse of nearly 103.5m yuan ($15.2 million) in funds at China Eastern-run businesses for staff bonuses, subsidies and other purposes.

    It termed the situation a "black hole."

    SOURCE: Agencies


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