Shenzhen owner investigated for ‘fraud’

CHINESE police are investigating the majority shareholder of Shenzhen Airlines for ‘economic crimes’. In China the term is used to refer to a variety of offences, such as fraud and money laundering.Li Zeyuan, who controls 65 per cent of the former state-owned carrier under the title of senior adviser, has had his command passed to Li Kun, the airline’s president, until the investigation is complete.In 2005, Li beat Air China to his stake of Shenzhen Airlines and it is alleged that it was that bid the police are investigating.Shenzhen Airlines owns a 51 per cent stake in Jade Cargo, the joint venture it formed with Lufthansa in 2004.Air China, which owns 25 per cent of Shenzhen Airlines and wants to increase its stake in the company, is paying close attention to the proceedings, creating more signs that there is an increasing drive to consolidation in the Chinese aviation industry.