{"id":60189,"date":"2013-04-15T15:07:49","date_gmt":"2013-04-15T19:07:49","guid":{"rendered":"http:\/\/www.thedetroitbureau.com\/?p=60189"},"modified":"2013-04-15T15:07:49","modified_gmt":"2013-04-15T19:07:49","slug":"about-1-5-billion-missing-at-chinas-2nd-largest-state-automaker","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2013\/04\/about-1-5-billion-missing-at-chinas-2nd-largest-state-automaker\/","title":{"rendered":"About $1.5 Billion Missing at China\u2019s 2nd-Largest State Automaker"},"content":{"rendered":"
\"\"<\/a>
The FAW scandal has touched the highest ranks of the company -- and beyond.<\/figcaption><\/figure>\n

China\u2019s endemic problem with corporate corruption appears to have caught up with the booming Asian nation\u2019s second-largest state-owned automaker where as much as $1.5 billion may have been embezzled.<\/p>\n

That has led the chairman of First Automobile Works Group, or FAW, to resign, while more than 100 senior managers have been questioned and some detained, according to reports out of China. The worsening scandal has also touched the ruling Communist Party, a deputy party secretary from Jilin province among those who have been grilled over the situation.<\/p>\n

\"\"<\/a>
Be in the Know!<\/figcaption><\/figure>\n

The scandal has been rapidly escalating in recent days though it appears to have stemmed out of concerns first raised in late 2011 when reports surfaced of a number of bribes worth about $15 million allegedly handed out in connection with parts purchasing, plant upgrades and other projects.<\/p>\n

FAW is one of China\u2019s so-called \u201cBig Four,\u201d and ranked second among the domestic makers having produced about 3.6 million vehicles last year.\u00a0 Like the others in that group, it has formed a variety of foreign alliances with manufacturers including General Motors, Mazda and Toyota. But its largest alliance is with Volkswagen AG and its Audi luxury brand.<\/p>\n

Specific details remain murky but according to numerous reports in the Global Times and other Chinese publications, as much as RMB 10 billion in capital has apparently vanished from the Jilin-based carmaker\u2019s coffers, with a preliminary investigation suggesting it has been embezzled.<\/p>\n

Among those under investigation are Zhou Younjiang, FAW\u2019s deputy chief economist, who has been linked to \u201cirregular\u201d real estate deals.\u00a0 Zhu Yanfeng, a 52-year-old former FAW president now with the provincial government, has also been subject to \u201cshuanggui,\u201d where party members can be detained and investigated.<\/p>\n

As the scandal has worsened, Chairman Xu Jianyi has tendered his own resignation, though it is not clear if he has been called in under suspicion, as well.<\/p>\n

The latest crisis comes barely a year after a senior executive in the FAW-Volkswagen joint venture was probed for corruption.<\/p>\n

An official with FAW tried to defer the situation by suggesting the company could take action against \u201cjournalists for misreporting,\u201d but the breadth of the news suggests the automaker is simply hoping to ride out the crisis, perhaps by having some of the potentially most serious revelations buried should they involve government officials.<\/p>\n

But the Communist Party has allowed a number of cases involving corruption to air in the media in recent years despite potential embarrassment to government officials.<\/p>\n

The scandal, meanwhile, is likely to scuttle what had been FAW\u2019s plan to float an IPO in the near future. It had been working on that move for the last five years, according to analysts following the company.<\/p>\n","protected":false},"excerpt":{"rendered":"

China\u2019s endemic problem with corporate corruption appears to have caught up with the booming Asian nation\u2019s second-largest state-owned automaker, First Auto Works, where as much as $1.5 billion may have been embezzled. TheDetroitBureau.com has the latest.<\/p>\n","protected":false},"author":2,"featured_media":60190,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[8],"tags":[],"make":[],"post-state":[],"category_old":[151],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/60189"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=60189"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/60189\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/60190"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=60189"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=60189"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=60189"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=60189"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=60189"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=60189"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}