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China warehouse blasts: firm 'used connections for hazmat permit'

Published 19/08/2015

Residents demand compensation for damages to their homes after the explosions in Tianjin. (AP)
Residents demand compensation for damages to their homes after the explosions in Tianjin. (AP)

The son of a former police chief is one of two silent owners of the Chinese warehouse wrecked by explosions last week, and used his connections to help obtain licences despite the hazmat facility violating safety rules, Chinese state media said.

The other owner is a former executive at a state-owned chemical company who also used his connections to smooth the way for approval for the facility, the official Xinhua News Agency said in a report on warehouse company Ruihai International Logistics.

The report on the Tianjin port explosions, which killed at least 114 people. supports the common perception that well-connected private Chinese companies use personal relationships with people in the government to override rules, sometimes with disastrous consequences.

It also shed light on the murky ownership structure at Ruihai, which had been the source of rumours of potential high-level connections and cover-up since the August 12 blasts, which also left 65 missing and 674 in hospital.

The two men, identified as former Sinochem executive Yu Xuewei and the late Tianjin port police chief's son Dong Shexuan, are among 10 Ruihai company officials detained in the investigation into the blast.

Dong said that Yu enlisted him into the company in 2012 because of his connections and that he was easily able to obtain a fire certificate for the hazmat business. "I brought all the materials for the renovation plans, and the fire certificate was soon issued," Dong was quoted as saying.

The fire certificate apparently allowed local planning officials to issue a building permit, even though the hazmat warehouse would be less than the required 1,000 metres away from homes and public roads, a clear violation of state safety rules.

"We took into account that the fire certificate was issued by the fire division," Zhu Liming, a planning official, told Xinhua.

Dong said Ruhai also had to clear another seemingly impossible obstacle. A safety evaluation firm had told Ruihai that a satisfactory report was out of the question because of the warehouse's proximity to residential homes.

"But Yu Xuewei asked me not to worry, but leave it to him. So he changed the safety evaluation firm and got the report," Dong told Xinhua.

Yu and Dong chose to be shadow owners. Yu asked his wife's cousin to hold his 55% share in Ruihai on his behalf, and Dong had a high school classmate claim his 45% share.

It was not immediately clear why Yu wanted to camouflage his involvement, but Dong told Xinhua he did not want his father implicated in the business.

"The public perception may not be good, given my father's position with the police," Dong told Xinhua.

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