China State-Assets Head Removed as Graft Inquiry Gains Pace

Photographer: Daniel J. Groshong/Bloomberg

Jiang Jiemin, director of China’s State-Owned Assets Supervision and Administration Commission, is under investigation for alleged “serious disciplinary violations,” the Ministry of Supervision said Sept. 1. Jiang is also the former chairman of China National Petroleum Corp., the country’s biggest oil producer. Close

Jiang Jiemin, director of China’s State-Owned Assets Supervision and Administration... Read More

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Photographer: Daniel J. Groshong/Bloomberg

Jiang Jiemin, director of China’s State-Owned Assets Supervision and Administration Commission, is under investigation for alleged “serious disciplinary violations,” the Ministry of Supervision said Sept. 1. Jiang is also the former chairman of China National Petroleum Corp., the country’s biggest oil producer.

China removed the head of the agency that supervises state-owned assets, pushing ahead with a corruption probe targeting the highest-profile official since the Communist Party began an anti-graft campaign in November.

Jiang Jiemin, 57, was removed as director of the State-Owned Assets Supervision and Administration Commission on suspicion of “serious disciplinary violations,” the official Xinhua News Agency reported, citing the party’s Organization Department. Authorities announced Sept. 1 that Jiang was being probed for the violations, which typically refer to corruption-related allegations.

The removal reflected party leaders’ determination to move swiftly against Jiang, formerly chairman of China National Petroleum Corp. The probe comes as China’s anti-corruption watchdog investigates at least four executives at the country’s biggest oil producer under the campaign against graft that President Xi Jinping unveiled last year when he took over the party.

In a statement dated yesterday and posted on its website, SASAC’s party committee said it “firmly supports” the probe into Jiang. “It will continue to promote the reform and adjustment of central enterprises,” the committee said in the statement.

Managers Removed

Last week, CNPC’s Hong Kong traded unit, PetroChina Co., said four senior managers had been removed amid an investigation by authorities. Hong Kong-listed Wison Engineering Services (2236) Co. said in a statement yesterday that its controlling shareholder, Hua Bangsong, was assisting Chinese authorities with their investigations, without giving specifics.

Wison provides consulting, engineering and construction services to chemical factories and oil refineries. The company’s shares fell as much as 18 percent yesterday before being suspended.

CNPC’s management and workforce are generally good and the central leadership realizes the oil industry’s achievements and contributions to the country, Zhang Yi, party secretary of SASAC, said at at meeting with CNPC Chairman Zhou Jiping.

Zhang said the anti-corruption investigation will cause short-term volatility and bring healthy development in the long run, according to a statement posted on CNPC’s website today.

Grave Threat

When Xi took over the top spot in the Communist Party last November, he warned that corruption posed a grave threat to the party. Since then, state-owned media have praised the government’s targeting of both “tigers and flies” -- party cadres across the power spectrum.

Other officials under investigation include Liu Tienan, former vice chairman of the country’s planning agency, and the deputy party secretary of Sichuan province, Li Chuncheng. Also today, China Central Television reported on its microblog that Zhang Shuguang, former deputy chief engineer at China’s Railways Ministry, is being prosecuted on charges he took about 47 million yuan ($7.7 million) in bribes in 2000-2011.

SASAC oversees trillions of yuan of the state’s stake in more than 100 companies, including CNPC and China Mobile Communications Corp., the parent of China Mobile Ltd. (941)

Those are the type of companies that Xi and Premier Li Keqiang need to exert control over to help implement reforms they seek to adopt at a November party meeting to discuss economic policy, Beijing-based economic consulting firm GaveKal Dragonomics wrote in a Sept. 2 report. The probe into Jiang as well as several CNPC executives indicates Xi is amassing power, the note said.

“Xi should have the ability to push through a strong agenda, judging from the scale of the anti-corruption probes he is overseeing,” the note said.

To contact the reporter on this story: Michael Forsythe in Hong Kong at mforsythe@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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