"The corruption of a leader is in no way limited to only one person," a source in Cosco Group told Beijing financial news portal Caixin Online, adding that other company employees have taken advantage of their positions to advance their own interests. 

Cosco Holdings controls 90 per cent of the entire group operation. It lost money in 2011 and 2012, and will be forced to suspend trading on the Shanghai Stock Exchange if it goes into the red again this year. Posting losses next year will mean delisting.

Earlier this month Cosco chairman Ma Zehua conceded "there are problems" with Cosco Dalian, but did not elaborate.

A source close to the situation told Caixin that investigators found that Meng had ordered Cosco Dalian's subsidiary Dalian Yuanchang Shipping Co to lease overpriced bulk carriers. 

Ex-Yuanchang general manager Gao Fusheng has also been arrested in connection with the alleged illicit activities. Gao was brought to the company by Meng and the two were close, the source told Caixin.

Meng retired from Cosco Dalian in January at age 60, normally with the expressions of appreciation for his contribution, even though many probably knew of the scandal, said the source.

This is not the first time the company's subsidiaries have been hit by corruption scandals. In 2012, Xu Huixing, former general manager of Guangzhou Ocean Shipping Co Ltd was arrested for taking at least CNY2.4 million (US$391,955) in bribes.

In 2011, Song Jun, former vice general manager of Qingdao Ocean Shipping Co Ltd, was caught illegally possessing 37 properties and more than US$7 million. He was charged with embezzlement, taking bribes and obstructing the collection of evidence.

Song's illicit income was traced to ship leasing and acquisition contracts the company signed jointly with a Taiwanese businessman from October 2006 to June 2010. Song made several million US dollars off the deals, said the report,