Ministries and commissions of the State Council that were found by the National Audit Office (NAO) to have misused public funds are undergoing further investigation, according to the Ministry of Supervision. Some have already been severely penalized.

According to the report Auditor-General Li Jinhua submitted to the national legislature on June 23, 41 ministries and commissions misused as much as 1.4 billion yuan (US$171.6 million), much of it dedicated to building residences or offices for their own use.

"Twenty-four of the cases uncovered by the auditors have been investigated and dealt with by the supervision departments over the past year," said an unnamed official with the Ministry of Supervision. Suspects involved in major cases have been arrested.

In one case, Feng Mingchang, a private entrepreneur in Guangdong Province, defrauded the Industrial and Commercial Bank of China (ICBC) of billions of yuan in loans. Bank and government staffers assisted Feng.

Together with Feng, Ye Jiasheng, former deputy governor of ICBC's Guangdong branch, Lin Junjiang, former governor of the Foshan branch, and other suspects including local government officials have been arrested.

Supervision departments also investigated an embezzlement and bribery case involving Liu Jinbao, former vice chairman of the Bank of China. Prosecutors are now looking into the case.

Lin Kongxing, former general manager of the Huazhong Power Group, is suspected of taking bribes and embezzling about 1 million yuan (US$120,000). Lin and his wife have been handed over to prosecutors.

The General Administration of Sport is also under investigation in connection with an embezzlement case uncovered by the NAO.

(China Daily July 12, 2004)