China Resources Chairman Song Faces Corruption InvestigationRachel Evans
China’s anti-corruption agency is investigating the chairman of China Resources Holdings Co. after domestic media repeated accusations a unit of the state-owned company deliberately overpaid for coal assets.
Song Lin, whose company is the parent of five Hong Kong-listed units, is being probed for “suspected disciplinary violations,” the Chinese Communist Party’s Central Commission for Discipline Inspection said in a statement on its website using language that signals a corruption probe.
His company controls China Resources Power Holdings Co., which was accused last year of paying too much for three coal mines in Shanxi province in 2010. The probe is a signal that the Communist Party is intensifying a campaign to root out the corruption that President Xi Jinping has said threatens its six-decade hold on power. Party leaders have promised to target both “tigers and flies,” or cadres up and down the power ladder, over graft.
A journalist at a newspaper owned by the official Xinhua news agency said April 16 he had reported Song to the anti-graft watchdog, according to the China Daily. The accusations are a total fabrication, Song said in a statement on the company website April 16.
The statement by Song has been retracted, the Beijing News reported today. Three calls to China Resources’ Hong Kong office today went unanswered because it’s a public holiday.
The three coal mines are high-quality assets and worth the investment, Wang Yujun, president of China Resources Power, said in August.
Song isn’t the first to be investigated following allegations of wrongdoing in state media. The Communist Party fired a vice chairman of the economic planning agency last May after a journalist posted allegations that he had improper business dealings. More than 180,000 party officials were punished for corruption and abuse of power last year, according to the Central Commission for Discipline Inspection.
China Resources will fully cooperate with an investigation of its chairman, the company said in a statement on its website late yesterday. Shares of its power unit rose 0.5 percent to close at HK$21 before the anti-corruption agency’s statement, adding to a 14 percent gain this year, compared with a 2.3 percent drop for Hong Kong’s Hang Seng Index.