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Huawei Implicated in China Mobile Corruption Case

By Zhang Xiaohui (张晓晖)
Economic Observer Online
Oct 11, 2011
Translated by Song Chunling
Original Article:

The trial of Shen Changfu (沈长富), the former party secretary and general manager of China Mobile's Chongqing office, began at Chongqing's No. 5 Intermediate People's Court on Oct 10. Shen is being charged with corruption, with prosecutors alleging that together with his son, Shen Juncheng (沈俊成) - who is also known as Shen Li (沈力) - he accepted up to 36 million yuan in bribes from various companies.

However, it's the details of how Huawei Technologies Co., Ltd. (Huawei) went about paying their bribe that has caught the attention of many.

According to court documents, Huawei is said to have paid Shen Juncheng more than 1.3 million yuan as a "salary" for a non-existent position he held at the company from late 2003 when he had returned from studying in the UK.

Shen Juncheng did intend to take a position at the company's Chengdu office, but left in Jan 2004 after receiving training.

Despite leaving his postion, Shen continued to receive his salary, along with generous annual bonuses. The company continued to sign new contracts with Shen and regular work performance forms were also faked.

An official from Huawei's Chengdu office told police that as the youger Shen's father was the head of China Mobile in Chongqing, they knew they had to look after him. Every year the Chongqing branch of China Mobile would purchase over 100 million yuan's worth of communications equipment from Huawei.

It was also revealed during yesterday's hearing that Shen Changfu, who was first detained in Apr last year, has since returned 48 million yuan to authorities. Shen also confessed to the charges.

Shen's case is also linked to that of Li Hua (李华), the former General Manager of the Sichuan branch of China Mobile, who was detained on suspicion of accepting bribes in June last year. Li was sentenced to death with a two year reprieve (which is often commuted to a life sentence) after a trial which began on Jul 5 and concluded in late August at the Panzhihua Intermediate People's Court.

According to the charges leveled by prosecutors during court proceedings, Li accepted over 16 million yuan in bribes during his 10 years as GM of the Sichuan branch of China Mobile. Li's case was just one of a number of corruption scandals uncovered at the Sichuan branch of China Mobile.

Zhang Chunjiang, the former vice-chairman of the Hong Kong-listed China Mobile, was also sentenced to death with a two year reprieve in July.

Links and Sources
Economic Observer: Former Head of Chongqing Branch of China Mobile Detained in Beijing
Economic Observer: Former Deputy Head of China Mobile Sentenced to Death with 2-Year Reprieve
Economic Observer: Former GM of China Mobile Sichuan Gets Suspended Death Sentence

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