Shutdown for a Gatekeeper of Telecom Gold

(Chengdu) – Equipment and IT services that sell for hundreds of billions of yuan, advertising contracts worth billions of yuan, and huge piles of cash for value-added services and special projects: It's all in a pot of gold at the end of China's telecom rainbow.

Many have found the gold, from multinational equipment manufacturers such as Siemens and Ericsson to small construction companies that build infrastructure for the nation's state-owned telecom empire.

But access to this glistening pot is restricted; only a limited number of executives at giant telecom companies, like leprechauns, know the secret way.

One of the gold gate-keepers was businessman Zhang Rui(张锐), according to investigators who have spent several months tracing corruption in China's telecom industry. Zhang was a key industry insider who apparently helped suppliers and contractors find those gold nuggets, while pocketing quite a few for himself.

Zhang moved freely through the executive suites of China's telecom world, giving advice to operator chiefs who called him an "industry sage" and quietly cutting deals for contractors in ways that earned him the nickname "invisible man." Only executives at the industry's highest echelons knew his name and his game.

Beijing art lovers, however, best knew Zhang Rui as the owner of a swank restaurant on the city's near-east side and a collector of contemporary art.

He might have held on to his art-lover front while continuing to run his advisory business Beijing Ruizhi Telecommunications Consulting Co. Ltd. behind the scenes if not for an investigation that exposed a corruption trail leading to his desk.

The first step on the trail, numerous sources close to China Mobile told Caixin, was the sudden dismissal and detention of China Mobile Group's former party secretary and vice president Zhang Chunjiang（张春江） in 2009. Authorities tied him to bribes worth more than 10 million yuan.

A pair of China Mobile leaders were the next to fall: the president of Sichuan Mobile, Li Hua（李华）, who has been detained since June; and the president of both Sichuan Mobile's data department and China Mobile's wireless music operations, Li Xiangdong（李向东）, who fled China earlier this year with an unknown amount of money.

Zhang and his wife, Raynetwork Advertising Co. President Yang Ruining, were recently detained by authorities on charges that remain unclear.

In the wake of the investigations, China Mobile has launched a major personnel shuffle involving several subsidiaries. And according to a telecom industry veteran, Zhang's trouble led to an exodus of Chinese executives working for several multinational telecom suppliers. They apparently left the country to avoid trouble.

The snowballing affair reflected the breadth and depth of the telecom industry's spending habits, and the enormous incentive for contractors to do whatever may be needed to find that pot of gold.

"I never imagined that telecom server-room air conditioning systems and alarm systems could be so lucrative," said one equipment supplier. "But telecom company fixed asset investment is really big, and even a small portion from the cup is still a lot."