Jun 22, 2006, 13:32 GMT
Beijing - A corruption scandal surrounding the construction of venues for the 2008 Beijing Olympics has widened with the arrest of the chairman of Capital Group, the largest construction and services company in the Chinese capital, the company and press reports said Thursday.
The arrest on Saturday of Liu Xiaoguang, chairman of Beijing Capital Group, followed the June 11 arrest of the sacked Beijing vice-mayor, Liu Zhihua.
Liu Xiaoguang, 51, has 'cooperated with the relevant authorities regarding the investigation' of Liu Zhihua, the company said in a statement to the Shanghai Stock Exchange Thursday.
The South China Morning Post, which is based in Hong Kong, said the probe revolved in part around a valuable piece of land adjacent to the Olympic Stadium.
The Hong Kong Stock Exchange suspended dealings in the shares of Capital Land, a subsidiary of Capital Group, on Wednesday.
No details have been released of the charges the two men - who are not related - could face, although Beijing municipal government officials said earlier this week that Liu Zhihua had been arrested for 'corruption and dissoluteness.'
The South China Morning Post reported Liu Zhihua had been arrested for involvement in requisitioning the Beijing Morgan Centre, a large property project next to the stadium, from its original developer, Beijing Morgan Investment, and selling it through public tender to Capital Land last month.
Quoting unnamed sources it said Capital Land had paid more than other bidders to win the project, which was taken from Morgan Investment for defaulting on land grant payments to the government.
Morgan Investment's Chairman Lin Qiang is reported to be suing the Beijing government.
Capital Group falls under the Beijing municipal government. It is active in municipal infrastructure construction, real estate, finance, industrial technology, commerce and trade, tourism and hotels.
The group's five holding companies are listed on domestic and foreign stock markets, and the group had total assets of 45.2 billion yuan (5.57 billion dollars) at the end of 2004. Net assets were put at 11 billion yuan.
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