A committee will soon be formed to oversee and manage the city's pension fund, sources at the Shanghai Municipal Labour and Social Security Bureau said yesterday.

The committee will look into major social security fund supervision issues, and issue public reports regularly. The need for such a committee arose after the Ministry of Labour and Social Security ordered its local branches last month to set up a rapid reporting system to ensure the safety of social security funds.

A report in Shanghai-based China Business News had earlier said a plan to set up such a committee had been submitted to the Shanghai municipal government at the end of last year, and the committee was likely to be formed this month.

Several government departments, along with the bureau, are working on the formation of the committee, which will consists of members of the standing committees of the municipal people's congress and people's political consultative conference, as well as experts in the field.

Management of the fund has drawn unprecedented attention since last September, when Shanghai found that more than 3 billion yuan ($386 million) had been taken out illegally from the fund and invested in highway construction and property development.

Senior officials, including former Shanghai Party Chief Chen Liangyu, many of his subordinates and heads of large State-owned enterprises, were arrested for their alleged involvement in the misappropriation. Chen became one of the highest officials to be removed from his post for corruption and abuse of power.

According to a release by the Communist Party of China (CPC) Central Commission for Discipline Inspection (CCDI), Chen protected officials involved in illegal activities and was guilty of nepotism and embezzlement. Authorities found large amounts had also been embezzled from the fund in Jinhua in Zhejiang Province. Another fraud was detected in Shanghai last month.

The Securities News said in December that Shanghai's largest shopping mall was linked to a 2.7-billion-yuan ($347 million) misappropriation from the fund, a charge that is being probed.

A National Audit Office report in November came up with a more damaging revelation: about 7.1 billion yuan ($900 million) of the country's 2 trillion yuan of social security funds had been misappropriated.

source: China Daily