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Subject: Shares in China Telecom fell on Monday after the ruling Chinese Communist party said at the weekend that the state-owned group’s chief executive,…
Excerpt: English text from the archived bilingual edition · Chinese edition
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Shares in China Telecom fell on Monday after the ruling Chinese Communist party said at the weekend that the state-owned group’s chief executive, Chang Xiaobing, was under investigation for “severe disciplinary violations”
The phrase is a common euphemism for corruption in China and such announcements by the party’s Central Commission for Discipline Inspection are almost always followed, at a lag of many months, by expulsion from the party, formal charges by government prosecutors and conviction
In a filing to the Hong Kong stock exchange on Sunday the company confirmed Mr Chang was under investigation but said business operations remained normal
China Telecom’s shares were down 1.9 per cent at HK$3.66 on Monday morning in Hong Kong after falling as much as 3 per cent. The broader marker was off 0.3 per cent
Mr Chang is the first high-ranking telecom executive to be implicated in President Xi Jinping’s sweeping anti-corruption campaign, which has previously focused on the petrochemical, automotive and aviation sectors
According to a recent report by the Eurasia Group, at least 14 state-owned enterprise executives with vice ministerial rank or higher have been placed under investigation for suspected graft, with five already convicted or handed over to government prosecutors
Mr Chang, 58, transferred to China Telecom, the smallest of the country’s three mobile operators, in August from rival China Unicom, where he had been chief executive for more than 10 years
It is not uncommon for the party to rotate senior SOE executives to a state-owned competitor, as they are essentially civil servants. At this year’s annual session of parliament, Mr Chang said his annual after-tax income was less than Rmb100,000 ($15,480)
Such transfers can sometimes be a signal that a Chinese executive is in trouble with anti-graft investigators, clearing the way for them to dig deeper at his or her former company
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