Major corruption probe after Caledon owner's $1bn loss
A MAJOR corruption probe is under way into the former heads of the Chinese state-owned Guangdong Rising, the owner of recently liquidated Caledon Coal.
Chinese media is reporting former chairman of the Chinese state-owned enterprise Li Jinming was handed to prosecutors for investigation after the company's Australian investments, including Caledon Resources, lost more than $1billion.
The South China Morning Post reported the company suffered losses of more than $1billion on its investments in Australia, made from 2008-2012 after commodity prices were hit by the global financial crisis.
It spent $500million on Caledon Resources, the owner of Cook Colliery underground coal mine and a part-owner of Wiggins Island Coal Export Terminal (WICET), in 2008.
Earlier this year the company was placed in liquidation, which led to the redundancy of more than 150 miners and left the five remaining owners of WICET worse-off as they continue to struggle to repay $3.9billion to 19 lenders.
The South China Morning Post reported the losses only came to light when Li Zezhong, who spent 11 years at the firm, left the company and became mayor of Zhuhai, in the Guangdong Province, in March.
His successor reported the losses to the Guangdong Provincial People's Procuratorate, kicking off the investigation.
Chinese financial website Caixin said investigators are seeking to interview another businessman, now living in Australia.
He chaired the committee responsible for state assets in the province, which led a team to Australia 11 years ago, to explore investments in mineral projects.