China Resources shares plunge on graft probe
April 23, 2014, 12:08 am TWN
HONG KONG -- The Hong Kong-listed shares of China Resources plunged on Tuesday after the head of the state-owned Chinese conglomerate was sacked amid allegations of corruption.
Beijing on Saturday announced the removal of Song Lin as chairman and party chief of the company for suspected law violations, state media reported, using terms which typically refer to corruption.
The firm, which has five listed units in Hong Kong, has also been accused of malpractice in a takeover deal involving lucrative coalmine assets in China.
Shares in the conglomerate's flagship China Resources Power Holdings closed down nearly 10 percent at HK$18.98, while the city's benchmark Hang Seng Index slipped 0.13 percent.
Shares of the group's other subsidiaries — China Resources Enterprise, China Resources Land, China Resources Gas and China Resources Cement — were all down by more than two percent.
China Resources also has five units listed in mainland China, but three have been suspended from trading for days for what the companies say is restructuring.
Textile maker CR Jinhua closed up 0.21 percent at 14.32 yuan (US$2.30) on Tuesday, while Dong-E E-Jiao — which markets a health product made from donkey skin — rose 0.29 percent to 34.51 yuan.
China Resources, a Fortune magazine Global 500 company in 2013, has a range of business interests including the retail, power, property, natural gas and pharmaceutical sectors, according to its website.
Chinese President Xi Jinping has pursued a highly publicized anti-graft drive since taking office, vowing to go after both senior “tigers” and low-level “flies.”
He has warned that graft could “destroy the (Communist) party,” threatening “no leniency” for those involved.
The announcement of Song's removal came just two days after the party's corruption watchdog said the executive was under investigation.
A journalist with the Economic Information Daily newspaper, which operates under the state Xinhua News Agency, has accused him of accepting bribes, laundering money and keeping a mistress.