PetroChina vows to contest shareholder lawsuit in US
The class-action complaint comes after the energy giant revealed that three top managers are being investigated by mainland authorities
PetroChina says it will fight a minority shareholder's legal challenge in the United States against its officials on alleged violations of US securities laws.
"The company will vigorously contest the complaint to protect [its] legitimate rights and interests," PetroChina said in a statement to the Hong Kong stock exchange.
The listed unit of the nation's largest oil and gas producer China National Petroleum Corp (CNPC) said its was aware that an overseas individual shareholder had filed a class-action complaint in a US court against the firm and two former and current directors and two former and current senior management officials.
It said neither the firm nor the executives had been served with any formal documents or notice of the complaint, although it said more similar complaints could be filed in the US.
The complaint came after PetroChina said last week that three of its top managers had resigned and were being investigated by Beijing for alleged violations of discipline. No details of the allegations were made public.
The three named last week are Li Hualin, board secretary and vice-president; Ran Xinquan, vice-president and general manager of its largest gas field called Changqing in northern China; and chief geologist Wang Daofu. Former chairman Jiang Jiemin, who in March this year was promoted to head the State-owned Assets Supervision and Administration Commission that oversees many of the nation's largest state firms, was a few days later placed under investigation for suspected "serious discipline violations" and was sacked.
PetroChina's share price has risen 0.6 per cent since the announcement, lagging the Hang Seng Index's 2.8 per cent gain in the period.
Its senior executives were in Hong Kong this week speaking to investors in a bid to allay concerns on the top management reshuffle affecting its operations and strategy.
A research note by Standard Chartered, which hosted an investor lunch, cited the management as saying the three officials' exit should lead to a "cleaner" PetroChina. "This, in turn, would strengthen the effectiveness of implementing its pre-defined strategy of shifting towards prioritising investment returns, rather than stressing on achieving scale, which has led to inflated capital expenditure with low return in the past," the note said.
The management plans to cut spending on oil refining and petrochemical plants, and allocate more funds to oil and gas exploration and production projects with better returns, they added.
PetroChina's total budgeted capital expenditure for this year is 355 billion yuan, almost double the 182 billion yuan in 2007 when Jiang became its chairman.
A Jefferies Securities research note said PetroChina's disclosures were not enough to explain the multibillion-dollar revenue shortfall and losses. "PetroChina has superb assets which have, unfortunately, sprung all kinds of leaks," the note said.
Meanwhile, Reuters quoted a PetroChina official as saying an internal memorandum requested that director-level managers - numbering up to 1,000 - to report their presence at work each day, in a bid to keep track of them in case they are needed as part of the disciplinary probes.