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China-Angola Middleman Arrested On Corruption Charges

China-Angola Middleman Arrested On Corruption Charges

A Hong Kong businessman who secured deals for China’s government-owned oil company in Angola is being investigated for corruption, Reuters reports.

Sam Pa, also known as Xu Jinghua, was arrested on Oct. 8.

China’s corruption watchdog announced the same day an investigation into Su Shulin, former Chairman of Sinopec, for suspected corruption, the financial magazine Caixin said.

China Petroleum & Chemical Corporation, or Sinopec, is a Chinese oil and gas company based in Beijing. It is listed in Hong Kong and also trades in Shanghai and New York.

Acting as a middleman, Pa was involved in Sinopec’s Angolan operations.

Not much is known about Pa, who used at least seven aliases, according to Quartz. He founded a complex corporate network known as the Queensway syndicate or the 88 Queensway Group — named after the address of its headquarters in Hong Kong.

Most of Pa’s business associates call him Mr. Sam. It’s thought he established relationships with African elites while working in Chinese intelligence.

The Queensway companies are connected to China’s ministry of foreign affairs, analysts said. They operated in resource-rich, politically isolated African countries like Angola and Zimbabwe where business and government dealings are less than transparent.

Charges against Pa include bribing African officials, smuggling diamonds, and trafficking illegal arms, according to Quartz. He was sanctioned in 2014 by the U.S. for allegedly supporting Zimbabwe’s long-time President Robert Mugabe.

Su was the head of Sinopec when it partnered with a Queensway company to develop its oil business in Angola.

It’s not clear how closely Pa is still linked to Queensway. The company says that he is now only an adviser. Nor is it clear how its operations in Africa will be affected if he is taken down by the Chinese.

Queensway is still “dependent upon Sam Pa and his connections in Beijing and other capitals,” said JR Mailey, an analyst who has been tracking the company for seven years, in a Financial Times interview.

Pa’s firm was involved in Sinopec’s oil exploration projects in Angola during Su’s reign as Sinopec chief, according to Caixin.

The Pa and Su investigations were related, Caixin reported. They were pictured together at the same high-level meeting in Beijing in 2008 alongside a top oil official from Angola.

Sinopec Corp has a 55-percent stake in Sonangol Sinopec International, a joint venture established in 2004 that owns a 50-percent interest in the deepwater Block 18 off the Angolan coast, Reuters reported.

Su is suspected of “serious disciplinary violation”, according to China’s Central Commision for Discipline Inspection. He’s the latest high-ranking official taken down during the country’s sweeping campaign against corruption.

Su also served as Fujian governor since 2011 and was appointed deputy Communist Party chief in Fujian.

Since Chinese President Xi Jinping took office three years ago, he has undertaken a sweeping campaign against corruption, waste and extravagance in official ranks.