Li Jianming, a coal merchant, is being held in custody by the procuratorate of Beijing's Yanqing County for bribery, Xinhua News Agency reported.
In August this year, Li was reported to have evaded tax amounting to over 400,000 yuan (US$48,309). During police investigations evidence of massive bribery going back seven years was uncovered.
The 28-year-old said he plunged almost half of his profits into offering bribes to build a protective umbrella for his business -- the illegal sale of polluting high-sulphur coal.
A preliminary investigation revealed that at least two government officials and three senior cadres of two large state-owned heating power companies in Beijing were found to have accepted bribes from him.
Although the total amount of bribes is currently unknown, Li confessed that he once gave Zhao Kuiyu, head of the Blue Sky Heating Company, 1 million yuan (US$120,000).
Zhao's company is in charge of providing heating to households in Wangjing, one of the largest residential areas in Beijing, and needs around 3.5 million tons of coal annually.
The bribe allowed Li to become their sole supplier, and also a major supplier to the Beichen Heating Power Plant. Both companies are large-scale, state-owned firms.
The corruption network also includes two government officials with the Beijing Municipal Bureau of Quality and Technical Supervision who are in charge of checking the quality of coal.
The coal sold by Li had a high sulphur content, but passed government checks allowing it to be sold as low-sulphur coal, which costs twice as much.
"Whether a batch of coal can pass examination or not is decided by the small shovels used to take samples. The shovels have no eyes, but the people have," Sun Jiyong, one of the officials, was quoted as saying.
Sun said they informed Li ahead of checks from which parts of a truck they would choose samples. Li simply put low-sulphur coal in the designated places.
He was also protected from an examination into coal quality that was jointly launched by several government departments last winter.
The two officials said that, several days ahead of the action, they passed Li detailed information that helped him to make preparations for it.
Guo Junqing, head of the quality and technical supervision bureau, was quoted by the Beijing Times as saying that Li's case sounds an alarm to the management of his bureau and pledged to take efforts to enhance the supervision of coal quality.
(China Daily December 17, 2004)
