China vows no let-up in graft scandal probe

BEIJING, Sep 26 (Reuters) China's ruling Communist Party vowed today to get to the bottom of a corruption scandal that has ensnared Shanghai's top official and to prosecute all involved no matter how high their rank.

The snowballing saga led to the sacking of Chen Liangyu as Shanghai's Communist Party secretary amid allegations he misused the financial hub's 10 billion yuan social security fund for illicit loans and investments.

Analysts say Chen's dismissal sends a strong signal to local officials nationwide to comply with national party chief Hu Jintao's policy agenda or face possible recrimination.

''Any party member who violates party discipline, no matter how high or low his rank, will be thoroughly investigated and seriously dealt with,'' Gan Yisheng, secretary-general of the party's anti-corruption Central Discipline Inspection Commission, told a news conference when asked to comment on the scandal.

''This fully demonstrates that the Party Central (Committee) with comrade Hu Jintao as general secretary ... adheres to the principle that all men are equal before (party) disciplinary rules.'' Gan dismissed media speculation the party leadership was split over whether to purge Chen.

In Shanghai, special police were manning airports and ports to prevent officials under investigation from fleeing, the Hong Kong Economic Times and the territory's Sing Tao Daily said.

The reports did not identify any other suspects or say how many officials might still be under investigation.

Senior Shanghai officials had been forced to surrender their passports and travel permits to Hong Kong and Macau while the investigation was under way, the newspapers said.

Shanghai officials needed party approval to travel abroad, the newspapers said, adding that three delegations were recently forced to cancel trips to Europe and Australia.

Chen also lost his seat in the party's elite, 24-member Politburo, making him the most senior official toppled in party chief Hu's drive to root out abuse and enforce loyalty.

Chen was accused of helping to enrich crony companies and relatives, state media said, citing a Politburo decision.

The corruption probe has implicated two senior Shanghai city government officials and at least three prominent executives in real estate, private investment and a utility firm.

''The scandal will send shockwaves throughout China's political hierarchy and weaken local official resistance to (the) central government's policy initiatives,'' said Jason Kindopp, an analyst at risk consultancy Eurasia Group.

''This is particularly true of administrative measures to slow investment growth as well as ... energy conservation and environmental protection,'' Kindopp said.

REUTERS PB RN1008