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Last Updated: Friday, 2 March 2007, 04:58 GMT
Shanghai officials hit by scandal
Pudong development in Shanghai - archive picture
Pension funds were allegedly invested in property ventures
Nine senior officials and business leaders have been reportedly expelled from China's Communist Party over a huge Shanghai corruption scandal.

They are accused of involvement in the misuse of government pension funds, according to state news agency Xinhua.

The dismissed officials include Zhu Junyi, director of the city's powerful labour and pension bureau.

Among the businessmen were Wang Chengming and Han Guozhang, from the Shanghai Electric Group.

Having been expelled from the Communist Party, the nine could now face criminal charges.

The timing of the announcement is seen as significant, coming just days before China's legislature - the National People's Congress - holds a meeting at which tackling corruption is set to be a key theme.

Criminal charges

More than 100 investigators have been studying what happened to the money that disappeared from Shanghai's 10 billion yuan ($1.25 bn) social security fund.

The funds were allegedly used to make illegal loans and investments in real estate and other infrastructure deals.

The investment deals lost the pension fund an estimated $475m, but the government says the money has now been recovered.

The nine people concerned represent some of the most senior figures among Shanghai's political and business elite, according to the BBC correspondent in the city, Quentin Somerville.

The government officials involved stand accused of taking huge bribes, immoral behaviour and leading decadent lifestyles, Xinhua says.

As well as Zhu Junyi, the expelled officials also include former local committee members Qin Yu and Sun Luyi.

Wu Hongmei, former deputy director of the State-owned Assets Supervision and Administration Commission, and Wang Guoxiong, former general manager of Shanghai Industrial Investment Group, were among the businessmen named in the Xinhua report.

Many have already been publically implicated in connection with the scandal, and sacked from their positions.

There is no word on when or if charges might be brought against Chen Liangyu, Shanghai's former party secretary.

He was dismissed in September also over the pensions scandal, becoming the most senior Communist Party official to be sacked in over a decade.

Despite China's market reforms, Communist officials still have control over large parts of manufacturing, banking and real estate industries.

Corruption is a widespread and growing problem, which Beijing is struggling to control, our correspondent says.

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