Chen Tonghai’s problems revealed

In mid-May this year, Chen Tonghai returned to Beijing after investigating Canada. The CPC Disciplinary Committee and Organization Department talked with him, and made four points: 1) hurry up and confess financial rule and legal violations both inside China and overseas; 2) try to make amends in exchange for more lenient punishment; 3) do not collude with others and try to hide the truth; 4) do not leave Beijing and do not go abroad.

Confession to four mistakes

In early June, Chen Tonghai submitted a “self confession” to the CPC Disciplinary Committee and Organization Department, admitting to four mistakes: 1) tampering with the company's books, keeping many different sets of books and evading taxes; 2) embezzling and diverting tax revenues collectively; 3) diverting public funds, giving cash and securities gifts to leaders and agencies at higher levels; 4) accepting expensive gifts and taking them home.

Confessions came while still at his post, and preparations to leave the country

In mid-June, He Yong, vice party secretary of the CPC Disciplinary Committee, talked to Chen Tonghai. He pointed out that his preliminary confession was good and Chen’s attitude was correct. But he gave Chen more time and asked Chen to confess to more financial items. He also told Chen to confess while remaining at his work post.
In reality, Chen Tonghai transferred his property while in the process of preparing his confession and made preparations to leave the country. From mid-May to June 20, Chen withdrew or transferred large sums of money 51 times from 12 accounts in Beijing, Tianjin, and Shenzhen to other accounts or for the purchase of foreign currency. The total of his transactions was RMB173m.

Dreams of escape dashed; freedom lost

On the afternoon of June 20 (Wednesday), Chen Tonghai went to Peking Union Medical Hospital and obtained a fake sick-leave slip for five days. After that he went to his company and called on senior members of the company and party leaders, asking a group to go to the Fragrant Hills Club for the weekend. This was his plan to deceive people so that he could escape.
On the same day at 7pm, Chen Tonghai visited the VIP lounge of Capital Airport. He smoked a cigar while waiting for a plane to Hong Kong at 8pm. He prepared to escape to Vancouver from Hong Kong the following morning. When someone came to take him away, he pretended to remain cool and said: “Are you mistaken? I have public business in Hong Kong; I have permission from the CPC Disciplinary Committee and Organization Department.” And he produced documents. But the person showed the original documents from the “Investigation Team of the CPC Disciplinary Committee” and Chen lost his composure and held on tightly to his brief case. At this point a cellphone in his briefcase rang and rang, his Hong Kong liaison was calling to find out his situation.
On the morning of June 21, the CPC Disciplinary Committee announced “double stipulations” for Chen Tonghai.
On the morning of June 21, State Counsel and CPC Organization Department announced a SinoPec Corp. party committee meeting and SinoPec Corporate board meeting regarding a senior level personnel change at SinoPec: Su Shulin was appointed party secretary and general manager of SinoPec. Former vice chairman of the board, Zhou Yuan, was made deputy chairman.
SinoPec stock dropped nearly 8%.
On June 28, Chen Tonghai's case was upgraded to “detainment and investigation,” and Chen Tonghai was held at a military detainment center under the Tianjin Garrison.

After Chen Tonghai was seized, his house was searched

After Chen Tonghai was detained, related departments found $520,000, CA$480,000, 650,000 euros, nine bank books in other people’s names, and five passports in different names from his two residences in Beijing (Fragrant Hills and Yuquanshan). Foreign currency in cash was found in toilet tanks, the bottom of his fish tank, and under his roof tiles. A German handgun was also found in a pair of shoes along with 12 bullets.

Personal file of Chen Tonghai

Chen Tonghai was born in Shandong in Sept. 1948 and his ancestry can be traced to Guanyun, Jiangsu province. His father, Chen Weida, held posts as party secretary of the Zhejiang Provincial Party Committee and the first secretary of the Tianjin Municipal Party Committee. Chen Tonghai was in high school during the Cultural Revolution and was sent to work in the Northeast. Later he was selected to become a college student in the Northeast Petroleum College. After he graduated, he worked in many places including the Daqing Oil Field. After he became an official, he served as vice director of the Zhejiang Provincial Planning Committee and mayor of Ningbo. In 1994 he became vice chairman of the State Planning Commission. In 1998 he was moved to SinoPec Corp. to serve as vice general manager and vice party secretary. In 2000 he became party secretary and now serves as chairman of the board, general manager, and party secretary. He is considered a senior cadre of ministerial rank. Chen Tonghai is well known within SinoPec as the “boss.” On average he has spent RMB1.2m in public funds on food and entertainment per month. In Sept. 2002, during an election, the CPC Inspection Department and State Counsel Office talked with him and told him to pay attention to his image, not to squander money, especially in front of foreigners. Chen Tonghai said at a party meeting: “We spend a million or two on entertainment every month, that’s nothing, our company pay over RMB20b in taxes every year. If you don’t know how to spend money, you won’t know how to make money either.” Chen Tonghai used to be a favorite of Zhu Rongji. Zhu praised him for his dynamism and said he was a state-owned enterprise leader with vision.