Two top honchos from the power sector fell into China's anti-corruption dragnet this week for their alleged involvement in a controversial coal investment deal.

On Wednesday, Jiangsu authorities detained Wang Yujun, president and executive director of China Resources Power (CRP). Shortly before his arrest, authorities revealed that they've arrested Shanxi coal tycoon Zhang Xinming earlier this month.

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Both Wang and Zhang are said to be the biggest beneficiaries of a 2012 coal investment deal that was greatly overpriced.   

Under the said deal, China Resources Power allegedly paid Zhang's coal company 7.9 billion yuan in 2012 for the purchase of three coal mines and several other related assets.

Last year, CRP minority shareholders brought the issue of the overpriced coal mines to national attention when they filed a lawsuit against former and current CRP officials, including Song Lin, who was chairman of CRP until his removal last April.

Wang, who became president of CRP in 2010, was accused of abusing power when he allegedly facilitated the purchase of the overpriced Shanxi coal mines. He was suspended from his post pending investigation of the graft case.

Zhang, on the other hand, is known to have close ties to Song, the alleged mastermind of the overpriced coal deal, which reportedly made it easy for him to cash in on the controversial purchase.

Zhang, 51, was a high school dropout who worked as a laborer in rural Taiyuan, until he discovered his pot of gold by engaging in the coal transportation business in the 1990s.  

In 2001, he founded Shanxi Jinye Coking Coal, which rose to seventh rank in Hurun China Energy List within four years of operation, with assets valued at 1 billion yuan or US$162.53 million.  Zhang also carved his niche as the richest man in Shanxi with assets estimated at 4 billion yuan.

But Zhang's subsequent business deals with the graft-ridden, state-owned China Resources Holdings Company eventually brought doom to his hard-earned fortunes.

In addition to his graft case, police are also investigating Zhang for alleged money laundering and mafia-style activities. 

TagsChina corruption