China’s Anti-Corruption Agents Knock Again on PetroChina’s DoorAibing Guo
Anti-corruption agents have paid another visit to the executive suite at China National Petroleum Corp., the nation’s top oil and gas producer. The official being investigated this time is Liao Yongyuan, vice chairman at listed unit PetroChina Co.
Liao is “currently under investigation by the competent authorities for suspected severe violation of relevant discipline and laws,” PetroChina said in a Hong Kong stock exchange filing on Monday. No further details were given. The investigation hasn’t affected operations and production, the filing said.
The anti-graft drive championed by President Xi Jinping has snared more than a dozen senior officials at CNPC and PetroChina since August 2013. Liao is the highest-ranking executive to be investigated since former Chairman Jiang Jiemin was pulled in in September 2013. Jiang was expelled from the party last year and is awaiting trial.
“It shows in the near term PetroChina is still under pressure from corruption investigations and clearly the house-cleaning campaign may not end any time soon,” said Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein. “It’s a positive development for PetroChina in the long term as the campaign can help build a better management team that PetroChina definitely needs to turn the corner.”
China has identified 26 state-owned enterprises as targets for graft inspections in 2015, after similar probes last year found corruption and abuse of power. CNPC, China National Offshore Oil Corp., the country’s biggest offshore oil and gas explorer, and State Grid Corp. of China are all on the list, according to a statement released last month.
PetroChina shares fell as much as 1.1 percent to HK$8.12 in Hong Kong trading this morning, the lowest since Dec. 17. The stock traded at HK$8.15 at 10:34 a.m. It’s gained 5.9 percent in the past year, compared with a 12 percent gain in the benchmark Hang Seng Index.
China’s anti-corruption office, known as the Central Commission for Discipline Inspection or CCDI, said in a statement on Monday that it was investigating Liao.
The CCDI, doesn’t have formal power to arrest or press charges, but in practice is among the most powerful and feared organizations.
It’s able to detain indefinitely and investigate any one of China’s roughly 87 million Communist Party members -- effectively every government official or executive at the state-owned enterprises that dominate China’s economy in key sectors such as finance, energy and transportation.
President Xi unleashed the CCDI as he warned that corruption was a threat to the ruling Communist Party’s survival. His unprecedented anti-graft campaign has snared about 100,000 officials at various levels in the past two years.
CNPC “firmly supports” the central government’s decision to investigate Liao and will ’’actively cooperate’’ with the probe, China Petroleum Daily, CNPC’s official newspaper, reported today on its front page.
Liao spent a long period of his CNPC career in China’s northwest, especially in Xinjiang in the 1990s, according to news website Caixin.com.
He was named general manager of the Tarim oilfield in Xinjiang in 1999, and promoted to vice-president of PetroChina in 2005, according to his resume, posted on CNPC’s website. He was born in 1962.