China’s Governmental Agencies And Airlines Riddled With Corruption


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China’s Governmental Agencies And Airlines Riddled With Corruption

By Daniel Baxter

June 30, 2010 - The director for the central and southern regions for the Civil Aviation Administration of China (CAAC), Liu Yajun committed suicide after authorities investigates organized corruption within this highly regulated industry.

Several airline executives have been terminated from their jobs as a result of an ongoing investigation. 

Liu Yajun jumped onto the tracks in front of an oncoming train on Thursday. Officials report there was no evidence Yajun was involved in corruption and the apparent suicide “was due to his depression and a lack of sleep”.


Yajun suicide is believed to have been tied to a series of ongoing corruption investigations. However, China having direct control over its news media historically dose not allow such news to be reported. Yajun took his position in February 2009. Since January, four senior officials of the CAAC have lost their jobs.

China's National Audit Office reported $15 million at China Eastern division was misused in staff bonuses and gifs. The news media called it a “black hole.” Industry watchdogs and insiders are saying the industry is riddled with influence peddling and bribery and most recently such criminal activity involved the awarding of air routes, slots at airports and construction at various airports. "They're toppling like dominoes" a headline in the China Business News, a major financial newspaper. 

The director for the Civil Aviation Affairs at the National Development and Reform Commission (China’s main planning agency), Kuang Xin was recently questioned into allegations he took bribes to approve airport projects. Xin was in charge of approving lucrative construction contracts at China’s airports. 

Huang Dengke, CAAC's north China chief, is currently under investigation for allegedly peddling air routes and time slots. As a result seven executives at China Southern Airlines are being investigated for being involved in corruption with Dengke. On June 11th Zhang Heping chief engineer with China Southern Airlines was terminated. The airline sent a notice to the Hong Kong Stock Exchange which stated Heping was let go "due to job arrangement." 


Zhang Zhizhong former Beijing airport chief was dismissed in March and is reportedly under investigation. Zhang had taken over as head of the airport from Li Peiying, who was found guilty in February 2009 of accepting $4 million in bribes and stealing a further $12 million in public funds. Peiying was executed on August 7, 2009 in Jinan after the Supreme People's Court upheld a lower court's rejection of his appeal.


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