Tongling Nonferrous Metals Group Co., the nation’s second-largest copper smelter, slumped the most in three months in Shenzhen as authorities started an investigation into the death of the company’s chairman.
The shares slid 4.1 percent at the 11:30 a.m. break, the biggest loss since March 10. The Shenzhen Composite Index dropped 0.5 percent. Company chairman Wei Jianghong fell from a building at about 11 a.m. yesterday, the company said in a statement to the Shenzhen Stock Exchange. Wei, 52, was also a delegate to the National People’s Congress, China’s top legislative body, according to the company’s 2013 annual report.
His death follows a string of similar incidents after the government introduced a nationwide crackdown on graft by officials and company executives. The former chairman of Harbin Pharmaceutical Group Sanjing Pharmaceutical Co. jumped to his death last month while being investigated for corruption. Bai Zhongren, the ex-president of China Railway Group Ltd., the second-largest rail-builder, fell from a building in January.
President Xi Jinping’s anti-corruption campaign is growing into one of the broadest in the nation’s modern history as leaders pledge to target “tigers and flies,” or officials at both ends of the power spectrum.
Wang Guangxun, the former public security head at China Railway Corp., is under investigation by prosecutors in Henan province for allegedly taking bribes, the 21st Century Business Herald reported today, citing prosecutors in the northern Chinese province.
China’s anti-corruption campaign is slowing the economy and could cut growth by 1 percentage point, Lu Ting, economist at Bank of America Corp., wrote in a note today.
“With an increasingly number of senior officials (tigers) being arrested, the anti-corruption campaign has dealt a blow to fixed-asset investment growth due to government officials and state-owned enterprises’ executives’ inaction either because they are in fear of corruption charges or because they are not financially motivated,” Lu wrote.
Tongling appointed Wei as president in 2003 before promoting him to chairman in 2007, according to the annual report. Tongling’s operations are normal with Vice Chairman Yang Jun named as acting chairman, the company statement said.