The power struggle behind China's corruption crackdown

The power struggle behind China's corruption crackdown
Liu Han, former chairman of Hanlong Mining, and his brother Liu Wei were sentenced to death by a Chinese court on charges of leading a mafia-style criminal gang for more than a decade in the Sichuan province.

BEIJING/HONG KONG - Liu Han seemed to thrive in the company of officials.

Even a birthday party in 2011 for Liu's primary-school aged son drew a crowd of bureaucrats in Chengdu, the capital of China's western Sichuan province where the flamboyant mining tycoon was based.

"There was a mayor of a nearby city with a population of three or four million," recalls Australian political lobbyist John Halden who helped win approval for Liu's mining investments in Western Australia and was invited to the October 15 celebration.

"There were senior people from the provincial treasury and about seven or eight officials from the city of Chengdu."

But Liu's close ties with officialdom didn't last.

When Chinese President Xi Jinping was named President at the end of the annual parliamentary session in March last year, the 48-year-old Liu was detained and surrounded by a different class of public servants; corruption investigators and prison guards.

The billionaire head of the privately-held Sichuan Hanlong group of companies is the first high-profile casualty of a power struggle wrapped in a corruption crackdown that is convulsing the senior echelons of the ruling Communist Party.

On Friday, a court in central Hubei province sentenced Liu to death after a sensational trial on charges of murder, gun-running, fraud, extortion, illegal gambling and a string of other offences. Liu had denied all the charges.

Liu's most serious offense, however, could well be political: He was caught up on the wrong side of a titanic power play, multiple sources say, because of his business partnership with the son of former domestic security chief, Zhou Yongkang.

In a campaign unprecedented in modern China, Xi is determined to bring down Zhou for making a behind-the-scenes grab for power, the sources say.

Patronage network

To get at Zhou, Xi last year began rolling up the strongman's extensive network of patronage, assembled over more than four decades in the oil industry, Sichuan provincial politics and the internal security services.

More than 300 of Zhou's relatives, political allies, business associates, underlings and staff, have been arrested, detained or questioned, according to people briefed on the investigation. Liu was one of them.

Investigators have targeted the giant, state-owned China National Petroleum Corporation - where Zhou was once general manager and Communist Party Secretary - and its subsidiaries.

First, they detained six senior executives from the oil giant late last year. Then, late last year, Xi launched a probe into Zhou himself and people around him.

Several of Zhou's men have been felled, including Jiang Jiemin, briefly the top regulator of state-owned enterprises, and former Vice Minister of Public Security Li Dongsheng. Authorities seized assets worth at least 90 billion yuan (S$18 billion) from Zhou's family members and associates, two sources said.

Liu's assets were included in these seizures.

Ahead of his trial, the official Xinhua news agency reported that authorities had last year "seized and frozen enormous amounts assets of Liu Han and the Hanlong group".

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