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Two steel producers punished for violating capacity cut rules

Updated: Dec 30,2016 8:05 PM

The State Council has issued punishments on two steel producers for violating China’s capacity cut rules. Over 100 officials will be held accountable, including two vice-provincial governors.

Huada Iron and Steel Corp Ltd. in Jiangsu province, established in 2010 with registered capital of 26.8 million yuan, was caught illegally producing low quality steel up to 175,000 tons with 640 million yuan in sales.

Authorities of Xuzhou and Xinyi have demolished the production lines after the irregularities were made public in July 2016, while the subsequent inspection detected 63 unqualified enterprises with the capacity amounting to 12.33 million tons in Xuzhou, Lianyungang and other eight cities.

Supervision loopholes, lack of executive ability and poor monitoring made irregularities possible. According to the circular, the demerits of Ma Qiulin, vice-governor of Jiangsu province will be recorded in the files, while a total of 111 officials will be held accountable.

Anfeng Iron and Steel Corp. Ltd, an iron and steel producer in Hebei province, illegally built iron producing facilities and had been producing excess iron and steel without receiving permission from local government officials.

The Hebei government neglected duties in China’s nationwide effort to retire excess capacity, and failed its obligation to file a report to central government departments.

Zhang Jiehui, vice-governor of Hebei province, will receive administrative warnings, and 20 officials will be held accountable.

More moves will be carried out to support the country’s capacity cut efforts, including launching nationwide inspections, detecting weak links, enhancing local responsibilities, and improving administrative efficiency.