Corporate China | Corporate crackdown nets Chalco, China Mobile execs
A new probe against a top Chalco official and life sentence for a former China Mobile executive indicate a current anti-graft campaign at state-owned enterprises could continue for a while
From an investor's perspective, I suppose the big question people are asking is: Should stock buyers be concerned when a top official at a publicly listed company comes under investigation for corruption? If it were a western company, the answer would clearly be "yes". But for these big state-run Chinese companies, the opposite is often the case.
In most instances, these executives move back and forth between various companies and government organizations every two or three years, as part of the Communist Party's rotation system for developing new leaders. As a result, none of these people are ever that fundamental to the operations of their companies, and often the corruption they're accused of occurred at some of their former jobs.
All that said, it's still somewhat significant that this current movement is gaining momentum, as it does seem to indicate that Beijing leaders want these big state-owned enterprises to act more like real commercial companies than state organs. If that's the case, they could slowly be released from their state connections, which could unlock some real potential for the better managed ones.