China Cosco Director Xu Quits Amid Probe; Shares DropJasmine Wang
China Cosco Holdings Co. Executive Director Xu Minjie resigned after the nation’s largest shipping company said he was under investigation by a regulatory body.
Xu quit because of “personal reasons,” China Cosco said in a statement to the Hong Kong Stock Exchange yesterday. The company said on Nov. 7 that Xu was being probed, without elaborating on why or by whom.
The probe, which comes after PetroChina Co. in August removed four senior managers amid an investigation by authorities, signals a broadening crackdown on corruption by China’s new leaders under President Xi Jinping. That may pave the way for more reforms at state-owned enterprises in a conclave of Communist Party leaders that begins today, said Hu Xingdou, a professor at the School of Humanities and Social Sciences at Beijing Institute of Technology.
“The anti-graft efforts by the new leadership is unprecedented,” Hu said in a telephone interview yesterday. “The investigations may help the leadership implement market-oriented reforms at state-owned enterprises that are monopolies at the moment.”
China Cosco fell 5 percent to close at HK$3.58 in Hong Kong, the biggest drop since July 3. It fell 3.9 percent to 3 yuan in Shanghai trading yesterday, the largest decline since Sept. 13.
The investigation won’t have a “material adverse effect” on the Tianjin, northern China-based company and its operations, the company said in the Nov. 7 statement.
PetroChina said in August that four senior managers had been removed amid an investigation by authorities. In July, a court gave former Railway Minister Liu Zhijun a suspended death sentence for abuse of power and receiving bribes.
China Cosco’s board said it will assess the investigation from time to time and advise shareholders of any material developments. The company said it was told about the probe by parent China Ocean Shipping Group Co.
Xu, 54 at the time of China Cosco’s annual report in April, is also an executive vice president of China Ocean Shipping, vice chairman of China International Marine Containers Group Co. and chairman of Cosco Logistics Co., according to data compiled by Bloomberg. He’s a graduate of the Qingdao Ocean Shipping Mariners College and holds business degrees from Shanghai Maritime University and the Maastricht School of Management.
Xu didn’t answer his mobile phone yesterday.
China Cosco said last month that its third-quarter net loss narrowed to 1.04 billion yuan ($171 million) from 1.53 billion yuan a year earlier. The company said in August that it was selling stakes in two real estate units to its parent for 3.73 billion yuan to avoid a third straight annual loss that could trigger delisting from Shanghai stock market.