Shenzhen mayor under investigation for graft

By James Pomfret  |   2009-6-7  |     NEWSPAPER EDITION

THE mayor of Shenzhen City in Guangdong Province is being investigated in a growing graft probe linked to the billionaire head of the Gome electronics retail chain, a newspaper reported yesterday.

Xu Zongheng had been put under shuanggui - a form of detention imposed on Party officials, given his alleged links to Huang Guangyu, the founder of Gome and once ranked the richest man on China's mainland, the South China Morning Post reported citing unnamed sources.

"His detention must have something to do with economic irregularities ... but it could also have something to do with a power struggle," a government source was quoted as saying by the Post.

Xu would be the latest senior official to be implicated in Huang's graft investigation, triggered by alleged financial misconduct last year.

Wang Huayuan, chief of the disciplinary body in Zhejiang Province, and the former head of police in Guangdong, Chen Shaoji, were both detained for investigation in relation to Huang's case.

Gome, China's largest electronics retailer, posted a 37 percent year-on-year drop in profit to 322 million yuan (US$47.12 million) for the three months ended in March.