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Official Punished for Illegal Profiting
Xu Penghang, vice minister of the Commission of Science, Technology and Industry for National Defense (CSTIND), has been removed from his post for collecting huge sums from illegal stock trades involving family members.
The Central Commission for Discipline Inspection (CCDI) of the Communist Party of China (CPC) has published the results of an investigation into Xu's activities.
The CCDI suggested that Xu be stripped of his position as an alternate member of the CPC Central Committee, but said he could keep his CPC membership with a two-year probationary period.
According to the CCDI, in December 1993, Xu used his influence to help a local company succeed in going public on the stock market.
After the company was listed, Zhang Jianping, Party secretary of the company, known as Kangsai Group, helped to transfer 20,000 yuan in high-interest loans the company borrowed from Xu's wife and daughter into 20,000 shares of the Kangsai Group.
In January 1994, Zhang told Xu that the company wanted to sell 40,000 of its shares to him. Xu told his wife, who later, with their daughter, purchased the 40,000 shares with Zhang's help.
In 1996, before the company floated its shares on the stock market, Xu's wife accepted another 43,600 shares from the company. At one point, Xu's family owned a total of 121,000 Kangsai Group shares, including some given to them by the company as a gift.
In August 1996, when Kangsai Groups shares were officially allowed to trade on the stock market, Xu asked Zhang to help sell all the shares. Kangsai Group then bought the shares for 1.13 million yuan.
Xu said that in December 1999, when he learned that the CCDI was investigating the case, he told his family and returned all the money earned from selling the shares back to the company.
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