China FAW Group Chairman Faces Communist Party Graft ProbeBloomberg News
The chairman of China FAW Group Corp., which makes cars with Volkswagen AG and Toyota Motor Corp., is being investigated by the Communist Party anti-graft watchdog.
Xu Jianyi was suspected of serious violations of party discipline and the law, the Central Commission for Discipline Inspection said in a statement on its website Sunday. An FAW spokeswoman, who asked not to be named according to company policy, said she couldn’t immediately comment because of the lack of details on the matter.
The auto executive, who also served as FAW’s internal Communist Party chief, is among the more than 100,000 officials snared during President Xi Jinping’s two-year campaign against corruption, according to official data. That crackdown has increasingly focused on state-owned enterprises, with 26 of the biggest firms named by the country’s anti-graft chief as inspection targets last month.
FAW Car Co., the company’s traded unit, fell 4.4 percent to 18.42 yuan in Shenzhen trading as at 9:36 a.m. local time, while the benchmark Shenzhen index rose 0.92 percent.
Besides FAW’s joint ventures with foreign automakers, the Changchun, China-based company also makes the Red Flag L5 limousine, which, costing at least 5 million yuan ($799,000), is the country’s most expensive vehicle. Formerly called First Automotive Works, the automaker was started by the Party as a linchpin of China’s industrial policy.
Investigators were looking into potential corruption at FAW Group, the state-run Xinhua News Agency reported in October, citing the Central Commission for Discipline Inspection. The company needed to sort out internal issues before following through on plans to go public, Xu said Thursday during the National People’s Congress in Beijing.
— With assistance by Alexandra Ho, and Tian Ying