Boss of China’s biggest defence and aerospace manufacturer Avic goes off radar
The chairman of China’s biggest defence and aerospace manufacturer Aviation Industry Corporation of China (Avic) has not been seen at office since early last week, say sources in the company, hanging a question mark on the management at the state-owned juggernaut that has more than 500,000 employees and 26 listed units.
Lin Zuoming, who shot to fame for attacking “malicious foreign short sellers” during last year’s stock market crash – only to find out that his subordinates had shorted the market – has not been at his job at Avic for at least a week and general manager Tan Ruisong has been in charge, sources in the company told the South China Morning Post.
Avic declined repeated requests for comment. Tencent News said in a report on Monday that Lin was suspended from his job pending a decision on where he would be placed next, China Business Network said on its website that Lin was on sick leave, citing people with knowledge of the matter.
Lin, born in Fujian province in 1957, has held the top job at Avic since 2008, having overseen a merger that year between Avic I and Avic II that created one of China’s biggest state-owned enterprises.
It is unclear whether his sudden break from work was related to the central government’s graft crackdown throughout last year. The Central Commission of Discipline Inspection visited Avic from July to August and said in a notice in October that it had found problems with Avic and its subsidiaries’ handling of project tenders and asset investments, among other things.
Avic, which makes military and civil aircraft including China’s self-developed Comac jets, made US$760 million on a revenue of US$62 billion last year, according to Fortune magazine’s Global 500 list, where it is ranked 159th.
Beijing in March formed China Aviation Engine Group after splitting three key listed subsidiaries from Avic, in a bid to build a globally competitive aircraft engine firm that would receive 100 billion yuan of investment.
According to sources close to the military, Lin has been against the creation of a separate engine company. He had in 2009 set up Shanghai-based Avic Commercial Aircraft Engine Co, an engine development firm whose performance failed to impress Beijing.
According to Avic’s official website, Lin last spoke at an internal meeting on April 18, but missed another meeting the same day in the afternoon with the State-owned Assets Supervision and Administration Commission, which Tan “hosted on Lin’s behalf”.
During the depths of the Chinese stock market crash last summer, Lin penned a strongly worded commentary in the Communist Party mouthpiece Global Times blaming hostile foreign investors for a scheme that, he said, was aimed at undermining the country’s reforms and the party. He also said Avic had spent 338 million yuan to buoy the stock of 20 subsidiaries in three days and vowed to defend the market. But only a week later, subsidiary Avic Capital was found to have sold stakes in another Avic firm in breach of rules.
Aerospace stocks in China rose 0.49 per cent on Monday while the CSI300 Index dropped 0.41 per cent. Sichuan Chengfa Aero-Science and Technology, an Avic company whose control changed hands to the new engine company, rose the most, by nearly 5 per cent.
Additional reporting by Minnie Chan