Top Chinese businessman arrested

The former head of Chinese oil firm Sinopec, who stepped down unexpectedly in June, has been arrested.

Officials confirmed that Chen Tonghai had been detained for questioning, but did not explain why.

Following Mr Chen’s decision to quit for “personal reasons”, state media reported that he was being investigated for “financial problems”.

Corruption is a major issue in China, with President Hu Jintao identifying personal malpractice as a huge problem.

He told the Communist Party’s 17th congress, currently being held in Beijing, that “extravagance, waste and corruption” were rife among a small section of the party.

If current levels of corruption continue, a leading US think-tank warned recently, it could eventually take the wind out of China’s economic sails.

Corruption was costing the economy $86bn a year, the Carnegie Endowment for International Peace said, adding that China would struggle to absorb these “mounting costs”.

Mr Chen oversaw huge growth at Sinopec, the largest oil refining business in Asia.

But his replacement this summer, two years before he was due to retire, by an executive from rival firm PetroChina came as a surprise.

His arrest was confirmed by Li Rongrong, head of the Assets Supervision and Administration Commission, but few further details were given.

“We have a special organisation to investigate it,” he said. “We will disclose to the public soon, or later after the investigation.”