China’s corruption watchdog zeroes in on cadres’ fake business investments
- CCDI says it is taking aim at officials who take bribes in the guise of dividends from private equity stakes
- It cites the case of a former China Development Bank official jailed last year for taking millions in illicit payments
In many cases, the invested company has no actual operations or profits and distributes dividends only to a handful of shareholders who are the officials or their proxies.
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As an example, the CCDI cited the case of Yang Degao, former vice-president of the Hubei branch of China Development Bank.
The commission said that from 2005 to 2014, Yang took advantage of his position in CDB to help a company obtain a loan from his bank.
Yang and four accomplices also invested 2 million yuan (US$280,000) in the firm, becoming shareholders and receiving fixed dividends every year.
The group received 8 million yuan in “dividend payments” and took back their “principal” of 2 million yuan in just the next few years, with Yang receiving over 3.74 million yuan more than his rightful amount, according to investigators.
In January 2023, Yang was sentenced to 12 years in prison for accepting over 31 million yuan bribes.
