Suspicious arrest at Shenzhen Airlines

CHINA’S security officials have removed Shenzhen Airline’s president – Li Kun – from his position while they investigate him for ‘economic crimes’. This follows the similarly suspicious arrest of Li Zeyuan, Shenzhen Airlines’ majority shareholder.

Fan Cheng, the airline’s Communist Party secretary and coincidentally Air China’s vice-president, will replace Li Kun. Air China is the second largest shareholder of the airline with 25 per cent after Li Zeyuan who owns 65 per cent. With Fan in charge, Air China’s threatened takeover, which both Lis were resisting, is not only guaranteed but also at a far cheaper price than it would have been had they agreed to the sale.

Li Zeyuan beat Air China to ownership of Shenzhen Airlines five years ago, a defeat Air China has been trying to reverse ever since. It wants the airline so that it can compete against China Southern Airlines, the country’s largest domestic carrier, along the southern coast, where it is weak but the other two airlines are strong.

Kong Dong, Air China’s chairman, said: “Shenzhen Airlines is very important [to us] in terms of building a strategic network.”

This is not the first time that critics have alleged Air China has used China’s security forces to attack its rivals. Last year, it took over East Star Airlines after its owner, Lan Shili, rejected Air China’s offer and was subsequently arrested on unspecified charges.

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