Xu Fangming, director of the Finance Department under the Chinese Ministry of Finance, was arrested Monday under suspicion of taking bribes, sources with local newspaper Beijing Times said here Tuesday.

The newspaper said the anti-corruption administration has found persuasive evidence that Xu took a bribe of 50,000 yuan (around 6, 000 US dollars). He is accused of involvement in a case that has so far resulted in the arrest of China Agriculture Bank officials Hu Chushou last year on graft charges.

It was reported earlier that the bribe Xu allegedly took was as high as millions of yuan, but evidence from the anti-corruption administration shows it was only 50,000 yuan. "The reported 50,000 yuan does not mean that that is the total amount Xu has taken," the local procurator said, indicating that the amount of the bribe may change with further investigation," a local procurator told Beijing Times.

A finance ministry official told another local newspaper, China Business, that Xu was found to "have embezzled public funds of more than 1.3 million yuan (about 157,000 US dollars)", and his illegal private assets "have been sealed up".

An unidentified source with close ties to the financial ministry told China Business that Xu was likely to be accused of malpractice, as he was in charge of the state-owned asset management of financial organizations. "Xu's case is likely to involve foreign investment business transactions, since his power also included the managing outward loans and the purchase of foreign products."

Another collegue of Xu recalled that this 47-year man gave people a "very good impression" when he first entered the ministry 23 years ago right after graduating from the Shanghai University of Finance and Economics. "His performance at work was outstanding," the collegue said. In 1998 when reform was carried out in the ministry of Finance, Xu distinguished himself and later became the director of the Finance Department in 2000.

"He was then only 43 years or so, and seen as a rising power with a bright future," said his collegues.

Xu also taught macro-economic control and governmental policies to post- graduates at the Institute of Financial Sciences. "Several weeks of his courses were not finished yet," a staff member with the institute said. According to China Business, Xu is the highest ranking official implicated in corruption in the investigation by China's National Audit Office that targeted the ministry of Finance.

Since the finance department represents the central government as the biggest shareholder in state banks, asset management companies and securities companies, Xu wielded considerable power. He was also on the seven-member board of the Central Huijin Investment company that holds the government's majority stakes in the four major state banks.

A report on the performance of the central budget in 2004 said that Chinese auditors found misuse of funds totaling 9.06 billion yuan (about 110 million US dollars) in 38 government departments in 2004. The figure represented six percent of all the funds put under audit.

Source: Xinhua