Wei Jinfeng, deputy director of the Guangdong Finance Department

(Guangzhou)—In the financial documents for a Guangdong Province grower and processor of tea seed oil is a list of key shareholders who also happen to be the relatives of local government officials.

Off the record, Guangdong Xindadi Biotechnology Co. Ltd. and its chief – a businessman who went out of his way to cultivate good relations with local officials – received but according to investigators never properly accounted for tens of million of yuan in government subsidies.

Tipping authorities to the alleged fraud was an anonymous source who gave police information about a provincial government official who owns 10 valuable pieces of real estate. His portfolio includes homes that would never be affordable based on his salary of no more than 10,000 yuan a month.

On June 18, the local Communist Party anti-corruption agency announced the detention of the official, Wei Jinfeng, a 50-year-old deputy director of the Guangdong Finance Department. His wife and mother-in-law were also placed under investigation.

Authorities followed an unusual paper trail. It began with a master's thesis Wei wrote as a graduate student at Sun Yat-sen University about the allocation of government subsidies.

He explored what was then a recently issued provincial policy to include a third-party vetting process in government contracting. The thesis cited loopholes in the rules that left room for corruption.

Shortly after Wei's detention, authorities broadened their probe to include the head of a tea seed oil manufacturing company in the city of Meizhou. He was Huang Yunjiang, chairman of Guangdong Xindadi.

Huang is well-known for showing generosity toward local government leaders. For example, he built a recreation center where retired government workers could practice brush strokes on giant calligraphy tables. Allegedly, the relationships he fostered helped streamline business license and funding applications.

Sources said ordinary people in Meizhou generally believed that Huang had ties to Wei, but apparently the two men purposely kept their distance in public.

Yet an investigator told Caixin that "Wei was clearly involved in the Xindadi business." He declined to elaborate.

Flagrant Fraud

Not only is 8-year-old Xindadi the largest tea oil manufacturer in Meizhou's Pingyuan County – a major center for tea plantations and oil processing since the 1970s – but it's been honored as a high-tech agribusiness company for its innovative tea-seed oil processing patents.