Doubts about Wison still not eased

Company's statement fails to end rumours of links to scandal-hit oil giant PetroChina

PUBLISHED : Tuesday, 03 September, 2013, 11:07am
UPDATED : Wednesday, 04 September, 2013, 1:31am

An announcement that Wison Engineering chairman Hua Bangsong was assisting investigations by mainland authorities was not enough to lift the veil of secrecy surrounding the private firm, which struck it rich through its close ties to PetroChina.

The Shanghai-headquartered provider of engineering and construction services for the petrochemical industry was operating normally yesterday after saying in a statement on Monday that Hua, its controlling shareholder, was "assisting the relevant authorities" in their investigations.

The announcement followed mounting suspicions about Wison's links to the oil giant, where top management have been snared in a corruption probe.

Wison's H shares sank 16 per cent on Monday morning before trading was suspended.

"It is obvious that the top bosses of Wison had a special relationship with the big shots at PetroChina," said a source with knowledge of Wison's operations. "To be fair to them, the senior executives appear to be well-educated, low-key and friendly to people."

Hua, 47, is a veteran of the petrochemical industry, with 23 years of experience.

A native of Xinghua, Jiangsu province, Hua established Wison in 1997.

Wison, which listed in Hong Kong last year, was little known to the public in Shanghai but began to attract attention after it built a new office building based on the Pentagon in Washington, in Shanghai's Zhangjiang industrial zone.

Sources briefed about the design by Wison officials said the grandiose building was aimed at helping the company streamline its management, since office space could be evenly distributed to major business divisions.

The new office building started operating earlier this year, with another old building in Zhangjiang also still in use.

Wison, now the eighth-largest mainland EPC (engineering, procurement and construction) company in the petrochemical sector, rivals state-owned players including Sinopec Engineering Group.

It secured a clutch of deals with PetroChina and its subsidiaries in the past.

In 2009, its business ties with PetroChina accounted for 63 per cent of its total revenue, with the percentage jumping to 80 per cent in 2010 before dropping to 58 per cent in 2011.

"The group's revenue recognised from contracts with PetroChina and its subsidiaries for the six months ended June 30, 2013, was insignificant," Wison said in Monday's statement.

A company official said Wison was looking to expand its businesses this year so as not to rely heavily on PetroChina.

It has been reported that Zhou Bin, the son of former public-security tsar Zhou Yongkang, worked for Wison and helped it win the orders from PetroChina. However, the company has denied Zhou Bin was an employee.