October 9, 2013 / 10:31 AM / 6 years ago

UPDATE 1-China arrests chairman of world's largest tin producer for bribes

BEIJING, Oct 9 (Reuters) - Chinese authorities have arrested and charged the chairman of the world’s largest producer of refined tin, Yunnan Tin Co, for accepting bribes, a provincial government said, in the latest example of the country’s crackdown on graft.

President Xi Jinping has made fighting corruption a key plank of his new administration, saying the problem is so severe it could affect the ruling Communist Party’s survival.

Yunnan Tin chairman Lei Yi had been charged with taking 20 million yuan ($3.27 million) in bribes from four people, the Yunnan government said on one of its official websites, including from the chairman of a company called Leed International Education Group in which Goldman Sachs has a stake. Goldman Sachs declined to comment.

The Yunnan government website said Lei had taken money from Leed chairman Li Hongtao to help smooth the way for Leed to buy Yunnan Tin’s 45 percent stake in a private college which both companies had set up in 2009. The tin company is based in the southwestern province of Yunnan.

The website report made no mention of Goldman Sachs, saying simply that Leed was co-founded by a “foreign investment group”.

A person familiar with the matter said that Goldman Sachs’ private equity arm signed an agreement with Li in 2008, in a deal worth under $70 million that ultimately formed Leed.

Yunnan Tin, in a statement to the Shenzhen stock exchange where the company is listed, said it was aware of Lei’s arrest. The firm’s vice chairman would take over Lei’s duties and the company was operating normally, it added.

The company had said on July 6 that Lei was under investigation for “serious discipline violations”, a phrase normally used to describe corruption. It was unclear if Lei had a lawyer.

An executive at Leed’s public relations department in Beijing, who gave her family name as Wang, said the education company would not comment on the matter and was unable to provide contact details for Li.

Yunnan Tin had output of around 70,000 tonnes of refined tin last year, nearly double the number 2 producer, Malaysia Smelting Corp Bhd.

Chinese authorities have announced the investigation or arrest of a handful of senior officials this year, and probes have begun to reach into powerful state-owned industries.

Among them, former executives from oil giant PetroChina are being investigated in what appears to be the biggest graft probe into a state-run firm in years.

Jin Zhong, a political commentator and editor of Hong Kong-based Open Magazine, said the Communist Party under Xi Jinping was trying to win public support by being aggressive in taking aim at corruption.

“Investigating corruption cases is a way for the leadership to establish popular trust,” he said.

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