Four senior officials from a Shanghai-based airfreight company are being investigated by Shanghai prosecutors over receiving bribes of more than 10 million yuan (US$1.25 million), China Business News said on Thursday.

Wang Qiang, Wu Sen, Yu Longjiang and Xiao Qixian are suspected of lending cargo plane berths to some agents for a "low price" and received "a huge amount of commission," the report said. The scandal also involves 23 other staff members from the company, which is a joint venture between Shanghai-listed China Eastern Airlines and China Ocean Shipping Group.

The incident was first unearthed in the company's branch in China's Shandong Province, the report said.

Prosecutor from Shanghai's Changning District approved the case. The administrative authority from the company refused to comment during a telephone interview with the newspaper yesterday.

Airline companies should pay no more than 4 percent of the total freight cost and no more than 3 percent for passenger transport to agents, China's General Administration of Civil Aviation regulates.

In practice, they very often give an additional commission to the agents and reward the specific deputies as well, said an insider from a local airline company.

These deputies, consequently, will transfer some of the rewards to the officials in the airline companies, the insider said.

China Eastern Airlines, the mainland's third-largest carrier who owns 70 percent of the airfreight company, reported a net loss of 1.72 billion yuan (US$216 million), or 0.35 yuan per share, from the 581 million yuan or 0.12 yuan, during the first half a year earlier.

Around 18 percent of the loss total, or 370 million yuan, is from its cargo unit, the report said.