Bo Xilai

China Everbright jumps 8pc after Bo's brother quits

PUBLISHED : Friday, 27 April, 2012, 12:00am
UPDATED : Friday, 27 April, 2012, 12:00am

Shares of China Everbright International yesterday made a smart recovery after the company distanced itself from former Chongqing party chief Bo Xilai's brother, who stepped down from the board on Wednesday.

The stock jumped 8.2 per cent to close at HK$3.57 in heavy trading in a market that rose 0.79 per cent.

The stock has been battered for days following media reports that Bo's brother, Bo Xiyong, also known as Li Xueming, was a director and vice-chairman of the company.

The rebound erased most of the stock's losses this month following reports of Li's connection to Bo.

The stock dropped 10 per cent on Monday after reports linking the two surfaced and remained stable for the following two days.

The senior managers of China Everbright, a construction, water and waste investment holding company, had earlier come under fire as they said they could not confirm if Li was Bo Xiyong, even though he had served on the board since June 2003.

This raised questions about the level of the company's corporate governance.

Even in the announcement on Li's resignation filed with the Hong Kong stock exchange on Wednesday, the company made no reference to his relationship with Bo Xilai. It merely said the resignation was aimed at 'minimising possible adverse impact on the company of certain reports recently published by the media on his family background'.

Li, 64, is also an 'executive director and deputy general manager of China Everbright Group and China Everbright Holdings', according to China Everbright International's annual results.

As the biggest political scandal on the mainland in more than 20 years, Bo Xilai's fall from grace has aroused widespread media interest at home and abroad, more so as it comes just months before a once-in-a-decade transition of power at the top of the Communist Party.

Bo, 62, was removed from the politburo and accused of serious violation of discipline, a party code for corruption.

Bo's wife, Gu Kailai is suspected of involvement in the murder of English businessman Neil Heywood, who was found dead in a hotel room in Chongqing in November last year. Heywood used to be close to the Bo family.

UNMAPPED FIELD root_remarks_fact_box = '27{+%} The gain in China Everbright International shares so far this year despite the recent activity'