CHINA: The most senior Communist Party official in China's financial hub, Shanghai, has been sacked for corruption, following an inquiry into abuses of the city's pension fund.
Chen Liangyu (60) is the most senior official to be sacked in China for a decade and has also been suspended from the Politburo, the party's top leadership council, Xinhua news agency reported. The central government in Beijing has been engaged in a high-profile campaign to weed out graft in the Communist Party, as they fear it has a destabilising influence.
Mr Chen stood accused of seeking benefits for companies and relatives and protecting people around him "who had seriously violated discipline and law", Xinhua reported, adding that the case had "created an odious political influence".
The sacking of cadres as senior as Mr Chen is rare. The last member of the Politburo to be dismissed for corruption was former Beijing party secretary Chen Xitong during the 1990s.
Mr Chen's sacking has wider political repercussions as it comes before the crucial 17th Communist Party Congress later this year, which president Hu Jintao hopes to use to strengthen his leadership. Shanghai is the bastion of officials loyal to Mr Hu's predecessor, Jiang Zemin, who is a former mayor of the city.
With a population of 18 million, the world's busiest port and a skyline of gleaming skyscrapers in Pudong bearing testimony to its power as China's financial centre, Shanghai's rise has been one of the most remarkable urban success stories of recent history. Much of that success was forged on the political influence wielded by the city fathers.
Mr Chen was a protege of Jiang Zemin, who built up a strong position in central government in Beijing for a posse of loyal foot soldiers sometimes called "The Shanghai Gang". His dismissal is being widely read as a sign the balance of power is moving from the financial centre back to the political centre.
The government investigation focused on the abuse of about one-third of a €1 billion pension fund to make illegal loans and investments in real estate and other infrastructure deals. Other senior municipal figures have also been weeded out in the probe.
There has been speculation that Mr Chen could be in trouble since August, when his former secretary, Qin Yu, was removed from his post as a district governor for his alleged role in the scandal.
The probe was enormous - over 100 investigators from Beijing took over a luxury hotel near the city centre, whizzing around the city in cars with tinted windows.
So far at least two other city officials and several executives from Shanghai Electric Group, China's biggest power gear maker, and Fuxi Investment, one of the city's biggest private investment firms, have been implicated in the scandal.
In an effort not to rattle nerves on the city's financial markets and ensure continuity, Mr Chen has been temporarily replaced by Shanghai mayor Han Zheng.