A paramilitary policeman guards in front of an emblem of the Communist Party of China (CPC) at Tiananmen Square on June 28, 2011 in Beijing, China. This year's celebrations will mark the 90th anniversary of the founding of the CPC.
An inquiry into corruption allegations against the former head of the company that oversees China's primary semiconductor industry investment fund resulted in his dismissal from the Chinese Communist Party.
The 'Big Fund'
A statement was posted on Thursday, Jan. 19, by China's top anti-corruption watchdog, the Central Commission for Discipline Inspection (CCDI). It said that Lu Jun, the former CEO of Sino IC Capital, was kicked out of the party for receiving bribes, embezzling money, and abusing state authority, as reported by South China Morning Post (SCMP).
The China Integrated Circuit Industry Investment Fund, or "Big Fund," is the nation's biggest organization in such a sector. It has more than 120 billion yuan ($17.7 billion) in capital and is managed solely by Sino IC Capital, located in Beijing.
More than 67% of the cash from the Big Fund has gone to local wafer foundries, including Semiconductor Manufacturing International Corp (SMIC) and Hua Hong Semiconductor. This makes China's key financing platform for chip startups and some of the country's top semiconductor-related firms.
Fraud Investigations
In July 2022, investigators began looking into Lu, Wang Wenzhong, a partner at Big Fund affiliate Shenzhen Hongtai Hongxin Equity Investment, and Ding Wenwu, the fund's former president.
As of September 2022, authorities were investigating allegations against Sino IC Capital vice president Ren Kai.
Wang, Ding, and Kai have all been prosecuted for possible wrongdoing, but the findings have not been made public.
In light of Washington's increasing efforts to limit exports of advanced chip-making technologies to China due to national security concerns, the scope of the investigations has stoked speculation and insecurity about their impact on the country's attempts to build a self-sufficient semiconductor supply base.
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Findings
After working in different managerial capacities at the Shanghai office and its investment vehicle since joining China Development Bank (CDB) in 2007, 55-year-old Lu became deputy director of CDB's Development Fund Management Department in 2020.
The state anti-graft bureau said that Lu had purchased and adorned business assets for his "personal enjoyment" and received gifts that might have damaged the fair performance of official responsibilities.
The report claimed that the former CEO had made personal investments in CDB customers and exploited his bank position to help friends and family businesses. When filling positions at the lender, he was also accused of favoring family members over more qualified applicants.
The statement did not specify whether Lu's wrongdoing occurred during his tenure at CDB or at Sino IC Capital, of which CDB owns 45%. After seven years of dual service, in September 2021, Lu resigned from his position at CDB.
According to the statement, severe damages to the government resulted from Lu's corruption, which included accepting bribes, stealing money, and abusing his position of authority.
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