China Ex-Rail Chief Charged With Taking Millions in Bribes

Source: AFP via Getty Images

A file photo from March 2005 shows former Chinese Railway Minister Liu Zhijun, who presided over the ministry at a time when millions of yuan were wasted or stolen. Close

A file photo from March 2005 shows former Chinese Railway Minister Liu Zhijun, who... Read More

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Source: AFP via Getty Images

A file photo from March 2005 shows former Chinese Railway Minister Liu Zhijun, who presided over the ministry at a time when millions of yuan were wasted or stolen.

Former Chinese Railway Minister Liu Zhijun stood trial today on bribery charges, in a case highlighting the graft that accompanied the roll-out of the world’s biggest high-speed rail network.

Liu, 60, allegedly accepted 64.6 million yuan ($10.5 million) in bribes between 1986 and 2011 and helped 11 people win project contracts and promotions, the official Xinhua News Agency said, citing the prosecutors’ indictment. Among the beneficiaries was a woman named Ding Yuxin, who reaped “huge profits” thanks to Liu, Xinhua said.

“Liu’s malpractice led to huge losses of public assets and damage to the interests of the state and people,” the indictment said, according to Xinhua. The verdict against Liu will be announced at a later date, it said.

Liu admitted his guilt and expressed remorse in today’s hearing, weeping as he read a personal statement, the Associated Press said, citing Liu’s lawyer, Qian Lieyang.

The former minister was among the highest ranked Chinese officials to face corruption-related charges until the downfall of Politburo member Bo Xilai amid a government clampdown on graft last year. Removed from his post in 2011, Liu championed what he called leapfrog development of a rail network that accumulated more than 2.84 trillion yuan of debt. He was expelled from the Communist Party last year.

The allegations of corruption surrounding the rail construction, along with a July 2011 bullet-train crash that killed 40 people, have come to symbolize broader concern over the quality of China’s infrastructure expansion.

Stolen Money

Liu presided over the ministry at a time when millions of yuan were wasted or stolen. In one case, at least 187 million yuan was misappropriated by individuals or companies involved in building the high-speed rail line from Beijing to Shanghai, the National Audit Office reported in March 2011.

Acknowledging the threat posed by corruption, President Xi Jinping called it one of the “severe challenges” faced by the party and has started a campaign to reduce extravagant spending by officials and state-owned companies since he became the party’s chief in November.

The Ministry of Railways was also dismantled earlier this year as the government seeks to rein in graft and red tape. Authorities split the ministry into two entities in March with China Railway Corp taking over commercial services and a Ministry of Transport unit having some regulatory functions.

To contact the reporter on this story: Jasmine Wang in Hong Kong at jwang513@bloomberg.net

To contact the editor responsible for this story: Stanley James at sjames8@bloomberg.net

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