Home / Business / News Tools: Save | Print | E-mail | Most Read | Comment
A deal or a steal?
Adjust font size:

In dire need of cash, Jiang attempted to transfer his stake in the company to Huawen Holding Company, an investment company under the People's Daily for more than 4 billion yuan.

"An expressway is different from ordinary industry. The government has the responsibility to sustain its stability," said Liu. Also according to the deal Jiang signed with Anhui provincial government, he is not authorized to sell his stake in the freeway to a third party without permission.

After his attempt was aborted, Jiang asked the Anhui Expressway Company to repurchase the expressway.

1.2 billion yuan loss of state assets

The negotiation between Jiang and Anhui Expressway Company collapsed several times due to divergences in price, said an official who participated in the process.

Jiang insisted on a quote of 4.2 billion yuan, based on the 5 billion yuan evaluation of Shanghai China Enterprise Chengxin Asset Valuation Company on March 31, 2005.

But the Anhui Expressway offered 3.693 billion yuan at most, based on the evaluation of the Anhui Guoxin Asset Valuation Company. "This is our baseline," said Liu.

When the talks came to a deadlock, the Anhui Expressway turned to the court for a solution. During the litigation, the company's lawyer Song Xiaolin discovered many irregularities committed by Jiang when he was operating the freeway.

According to the agreement between Jiang and the Anhui government, Jiang cannot impawn the toll rights of the expressway for bank loans without permission; otherwise, the contract will terminate automatically. However, Song's investigation showed that the rights had been impawned many times by Jiang, who got loans worth 1.962 billion yuan in the No. 1 Shanghai branch of Industrial and Commercial Bank of China alone.

The Anhui Expressway asked the Hefei Intermediate People's Court to terminate the contract unconditionally. The lawsuit came to a stop when the Anhui Expressway received higher-level instructions asking for stability and proper handling of the matter.

Under court mediation, the two parties reached an agreement in November 2005. The Anhui Expressway would buy the 25 percent stake from the company's overseas shareholder for 370 million yuan and at the same time assume the company's debt liabilities worth 3.21 billion yuan, totaling 3.58 billion yuan.

According to the NAO report, a total of 1.24 billion yuan was lost in the transfer of managerial rights of the expressway.

Toll period extended by 28 years

In 2006, the National Audit Office conducted an investigation on the expressway. Later on, four ministries and commissions, including the CPC Central Commission for Discipline Inspection, National Development and Reform Commission and Ministry of Communications, set up a team for an eight-month investigation.

     1   2   3   4   5    

Tools: Save | Print | E-mail | Most Read
Pet Name
China Archives
Related >>
- China drafts law to protect state assets
- State assets law under NPC review
- Shanghai Has New State-assets Regulator
- China Enhances State Assets Protection
- China to Take Measures to Prevent State Assets Loss
- State Assets Supervisor Repeats 'Active' Stand in Share Reform
Most Viewed >>
- Beijing auto show to kick off on Sunday
- Textile firms struggle to survive in 2008
- Urban real estate prices up 11% in Q1
- Oil wholesalers should have minimum 15 days reserve
- Largest yet 'Canton Fair' opens

April 11-13 Boao Forum for Asia

May 15-17 Shanghai Women's Forum Asia

Dec. 12-13 Beijing
China-US Strategic Economic Dialogue

- Output of Major Industrial Products
- Investment by Various Sectors
- Foreign Direct Investment by Country or Region
- National Price Index
- Value of Major Commodity Import
- Money Supply
- Exchange Rate and Foreign Exchange Reserve
- What does the China-Pakistan Free Trade Agreement cover?
- How to Set up a Foreign Capital Enterprise in China?
- How Does the VAT Works in China?
- How Much RMB or Foreign Currency Can Be Physically Carried Out of or Into China?
- What Is the Electrical Fitting in China?