Zhu Junyi, director of Shanghai Municipal Labour and Social Security Bureau, was expelled from the Standing Committee of the National People's Congress on 27 August after he was accused in an NPC notice of a "grave breach of discipline" in supervising the use of government pension funds.
The 55-year-old labour official is the first Shanghai bureau chief to resign as a national legislator, Xinhua said. He is now under investigation on charges of receiving bribes and violating state financial rules, reported the official news agency citing undisclosed sources.
More than 100 investigators from Beijing have arrived in Shanghai to probe the corruption case in which money was siphoned off from Shanghai's social security system, which manages over 10 billion yuan (US$1.25 billion) in funds, the report said.
Zhu is suspected of illegally lending more than 3 billion yuan of city funds to a company called Fuxi Investment Holding Co., which invested it in an expressway linking Shanghai and Hangzhou.
Fuxi is controlled by Zhang Rongkun, a well-connected businessman who was last year listed as China's 16th richest man by Forbes magazine, with an estimated fortune of 4.9 billion yuan (US$605 million).
At the 12th Shanghai municipal people's congress on 11 August, local lawmakers also dismissed Zhu from his bureau post.
Due to ageing population and the collapse of many state-owned enterprises, which had provided cradle-to-grave welfare for workers, China faces a large shortfall in its funding of pensions, the Financial Times pointed out. The pension deficit of Shanghai has surged from 700 million yuan (US$88 million) in 2000 to 4 billion yuan (US$502 million) by 2002.
Sources: Xinhua News Agency (27 August 2006), South China Morning Post (28 August 2006), The Times UK (26 August 2006), Financial Times (27 August 2006)
28 August 2006