Travel In China: More China Southern Executives Removed in Graft Probe

(WSJ) Three more employees at China Southern Airlines Co. and its state-owned parent have been linked to an anticorruption probe, bringing the total to seven senior executives arrested in recent weeks on bribery allegations at the nation's largest carrier by fleet.

Lu Hongye, general manager of the airline's finance department, and Hu Zhiqun, general manager of the construction and development unit of China Southern Air Holding Co, were recently arrested, according to a senior China Southern executive who declined to be named.

Mr. Lu's finance department subordinate, Tao Lifang, was also arrested, the person said. The arrests took place between late December and early January.

All three employees were removed from their posts in early January, the executive said.

Calls to Mr. Lu's mobile phone were unanswered, as were calls to the offices of Mr. Hu and Ms. Tao.

A spokesman at Hong Kong and Shanghai-listed China Southern declined to comment. The arrests were first reported by the state-run China Daily.

The arrests were part of an investigation by China's top antigraft agency into the Guangzhou-based carrier launched late last year, the executive said. Four other senior executives have also been removed.

On Jan. 5, China Southern said it removed Chief Financial Officer Xu Jiebo and Executive Vice President Zhou Yuehai from their posts because they were being investigated on "suspicion of job-related crimes."

This came just a week after the airline said it removed its director of flight operations, Tian Xiaodong, as well as Executive Vice President Chen Gang from their posts for similar reasons. These executives were also arrested by authorities, said the executive familiar with the situation.

The arrests come amid Beijing's massive anticorruption campaign spearheaded by China's Central Commission for Discipline Inspection to overhaul the nation's state-owned enterprises.

The executive said Friday that a special task force from the corruption watchdog visited China Southern's offices in late November to carry out an internal audit.

China Southern has previously been subject to corruption investigations. In late 2013, four of its employees were arrested on suspicion of corruption, according to the official Xinhua News Agency.

These included two deputy directors at the airline's marketing and sales department, Xinhua said. It was unclear whether these people were officially charged.

Source: Wall Street Journal by Joanne Chiu | Photo: Reuters

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