Special: China blast site owner on state company’s board

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Ng Han Guan/ AP

In this photo taken Thursday, Aug. 13, 2015, Chinese males walk through the site of an explosion at a warehouse in northeastern China’s Tianjin town.

Thursday, Aug. 20, 2015|8:32 p.m.

SHANGHAI– The guy unveiled as primary owner of the storage facilities at the center of deadly blasts in Tianjin also is on the board of a state-owned business that is eventually controlled by the same effective entity examining the surges, an Associated Press evaluation of public files found.

Business filings show that Yu Xuewei, the silent bulk shareholder of Ruihai International Logistics, rests on the board of directors of a subsidiary of China Sinochem, one of the nation’s most prominent conglomerates. Like other large state business, Sinochem is controlled by the State Council, the main authority supervising the examination into recently’s explosions at Ruihai’s chemical storage facilities that eliminated at least 114 individuals and displaced thousands.

Yu’s connections mean the degree of his political network and display the complexity of China’s political system, where the entity running an investigation can be linked to the business it is examining. Significant state-owned Chinese companies commonly are implicated of ignoring security and other regulations, specifically Cabinet-level business whose chief executives have a higher status in the ruling Communist Celebration hierarchy than the regulatory authorities who are expected to supervise them.

The subsidiary where Yu works as a director, Tianjin Port Sinochem Dangerous Goods Logistics Co., also has been accused of breaching safety standards at its own hazmat warehouses. The ecological group Greenpeace launched an examination today saying Tianjin Port Sinochem and its sibling business, Sinochem Tianjin Binhai Logistic Corp., operated dangerous chemical warehouses less than 1,000 meters (3,280 feet) from a major highway, schools and homes, in infraction of Chinese security laws.

China Sinochem has actually attempted to distance itself from Ruihai. Two days after the surges it published a statement acknowledging that former staff members worked at Ruihai, however disavowing any deeper links. Sinochem wrote that Ruihai “has no relationship with Sinochem or its affiliated companies” which previous workers had “all long ended employment” with Sinochem and its affiliates.

Current business records, nevertheless, show that Yu was a director Tianjin Port Sinochem even after he established Ruihai. Those records, filed with the Administration for Market and Commerce in Tianjin, were last updated in February and no subsequent changes to the board have been taped. The majority owner of Sinochem Logistics is Sinochem Tianjin Co., a subsidiary of China Sinochem, AIC records reveal.

Attempts to reach Sinochem for comment Thursday were not successful. Nobody at Tianjin Port Sinochem answered the phone. Sinochem Tianjin Binhai Logistic Corp. referred questions to the Sinochem Group. Calls, e-mails and a text message to Sinochem’s spokesman were not returned.

Yu confessed to utilizing his political influence to obtain around safety norms in an interview published Wednesday by the state-run Xinhua News Agency, which was given unique access to him in detention. He stated he masked his affiliation with Ruihai by registering his 55 percent stake in the name of his other half’s coz.

The now-destroyed Ruihai storage facilities broke Chinese law due to the fact that they were less than 600 meters (2,000 feet) from a huge real estate complex, freeway and light rail station– and for other reasons. Ruihai was licensed to storage facility hazardous chemicals just through Oct. 16, 2014, according to Administration for Industry and Commerce records. Ruihai acquired a port license in June 2015 that again allowed them to deal with harmful chemicals, however in the interim handled hazmat without a license, according to Xinhua. Ruihai likewise failed to submit annual reports in 2013 and 2014, according to its filings.

Yu owns Ruihai with Dong Shexuan, whose father utilized to be chief of authorities at Tianjin Port and put his shares in the name of a schoolmate, according to Xinhua. Both males have been detained by police.

Dong informed Xinhua, “My connections cover cops and fire, and Yu Xuewei’s connections cover work security, port management, customs, maritime affairs, environmental management.”

Regardless of such plain revelations in China’s main media, the full web of interlocking interests and ownership behind Ruihai stays murky. The scope of published examinations has actually been largely restricted to Ruihai’s local power network. Reports in Chinese media exploring Ruihai’s connection with Sinochem have been censored.

Sinochem, founded one year after the People’s Republic of China itself was born, has interests in energy, agriculture, chemicals, property and monetary services. Sinochem said in its latest annual report that it has 50,000 staff members and more than 300 subsidiaries.

The State Council, China’s cabinet, has established a panel to examine the mishap, which has actually triggered public outrage at regulatory and safety lapses and gross chemical contamination in among China’s biggest cities. Chinese Premier Li Keqiang stated the investigative group would “severely” punish those liable, according to Xinhua, the mouthpiece of China’s Communist Party.

“If our homes are gone how can we have the faith to support and love the party or the nation?” stated Niu Guijun, who bought a home near the blast website in 2013.

Ruihai’s links to the State Council illustrate the overlapping corporate, political and regulative interests that are the standard in China’s one-party system.

“Who tries to keep an eye on how the industry works– regulators– government officers who establish security policy, as well as the office business owners, all these interests are combined,” stated Fu King-wa, an associate teacher at the University of Hong Kong’s Journalism and Media Studies Center. “I believe a lot of people discover this a problem, however there’s no channel to attempt and execute reform in a political way.”

Yu and the reported frontman for his shares in Ruihai, Li Liang, played functions in a minimum of 4 other companies, according to Chinese and Hong Kong business filings.

Though Yu Xuewei’s name does not appear in Ruihai’s business filings in China, Hong Kong records reveal that he set up a business called Hong Kong Ruihai International Logistics Co. Ltd. in January 2013, less than 2 months after Ruihai Logistics was registered in Tianjin. Lots of mainland business likewise sign up in Hong Kong to assist in trade funding.

AIC records likewise name Yu as a board member of Tianjin Henglu Biopharmaceutical Technology Co. Ltd., which was established in January 2014 to do advancement and consulting work and offer chemicals, though not harmful ones.

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