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Eight arrested over billion-dollar steel project
(Agencies)
Updated: 2004-06-12 17:33

China has formally arrested eight managers of a billion-dollar steel factory in eastern China on charges of evading some seven million yuan (845,000 dollars) in taxes, state press said.

The eight have been in detention since April, when Chinese Premier Wen Jiabao put a halt to the construction of the 1.28-billion-dollar Jiangsu Tieban Iron and Steel Co Ltd plant amid allegations of corruption and mismanagement.

The move was also widely seen as part of efforts by the central government to curb overheating in the economy, especially the red-hot steel sector.

Those arrested were company manager Dai Guofang and his wife Huang Heqin, vice manager Zhang Xiqing and other company officials and accountants, Xinhua news agency said on its website.

Specific charges against them related to 10 sales receipts for the purchase of scrap steel which allowed the company to evade 7.0 million yuan in taxes, it said.

The project in the eastern province of Jiangsu had an expected production capacity of 8.4 million tons and total investment of 10.6 billion yuan (1.28 billion dollars).

It was announced this month that another massive steel manufacturing project could also be stopped over alleged irregularities.

The 1.2-billion-dollar Ningbo Steel project in Ningbo city, eastern Zhejiang province, was awaiting a final judgement from the State Development and Reform Commission (SDRC), officials said last week.

The joint venture between Chinese, Hong Kong and US investment firms was originally expected to go into production in August.

The project, linked with former official-turned-businessman Zhang Zhixiang, was allegedly started without Beijing's approval.

The clampdown on the two projects have been widely seen as steps by the government to slow down China's economy, which powered its way to 9.8 percent growth in the first quarter of 2004 from an already hot 9.1 percent in 2003.

 
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