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China investigates nuclear official
Published on: 2009-08-06
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BEIJING -- China said the head of the powerful company spearheading its expansion of nuclear power -- a multibillion-dollar push that has attracted intense foreign corporate interest -- is under investigation for "alleged grave violations of discipline."

Officials didn't release any more details about the allegations against Kang Rixin, the general manager of state-run China National Nuclear Corp., known as CNNC. Phones went unanswered at its headquarters, and officials couldn't be reached to comment.

The investigation was disclosed in a statement from officials within the Chinese Communist Party through state-controlled media. Mr. Kang, who is CNNC's top party official, has been a member of the powerful Central Committee of the Communist Party since 2007.

Mr. Kang is at the heart of a program that involves commissioning nuclear-power plants and securing uranium supplies from countries including Jordan, Kazakhstan, Russia and Algeria. CNNC is directly involved in a number of projects and has a broader role in planning the nuclear expansion effort.

China has 11 operating nuclear reactors and 23 more under construction or planned. Officials are considering doubling the target for nuclear-power generation by 2020 to 86 gigawatts, from the current goal of 40 gigawatts, according to state media reports.

The business involved in meeting such a goal represents a major prize for companies. Westinghouse Electric Co., France's Areva SA and others have been pursuing nuclear business in China. Westinghouse, owned by Toshiba Corp., is working with a CNNC unit on a nuclear plant in eastern Zhejiang province. Westinghouse officials couldn't be reached Wednesday.

Areva two years ago clinched contracts valued at more than $11 billion to supply China Guangdong Nuclear Power Holding Co. with two advanced nuclear reactors, among other things. China has also been promoting the development of domestic nuclear-energy firms, CNNC among them.

The International Atomic Energy Agency says 52 nuclear-power stations are currently under construction world-wide, mostly in Asia.

Operations at CNNC International Ltd., CNNC's Hong Kong arm, will continue unaffected by the investigation, said Philip Li, company secretary there, who added Mr. Kang doesn't hold a position there. Its Hong Kong-traded shares Wednesday fell 18% to 10 Hong Kong dollars, or US$1.29, a share. CNNC International recently took over Western Prospector Group Ltd., a Canadian uranium company.

The investigation into Mr. Kang is the latest in a high-profile crackdown on government and corporate corruption ahead of China's 60th anniversary in October.

Authorities have been investigating the mayor of Shenzhen, one of China's richest cities, for "serious disciplinary offenses," state media reported. The heads of special industrial zones in the cities of Tianjin and Wenzhou are also under investigation.

In July, the former chairman of a major Chinese oil company, Sinopec Corp., was convicted of accepting close to $28 million in bribes.

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