China Resources shares slide as chairman Song Lin is sacked and faces corruption probe
Subsidiary China Resources Power sees the sharpest slump after parent company's former chairman is investigated for corruption
Shares of the five Hong Kong-listed units of China Resources Holdings tumbled yesterday, as investors reacted to news over the long weekend that the state-owned conglomerate's former chairman, Song Lin, had been sacked and the mainland's graft watchdog had started investigating him for corruption.
China Resources Power (CRP), the largest of the five by market capitalisation, saw the biggest fall of 9.6 per cent to close at HK$18.98. It had fallen as much as 11.9 per cent - the steepest decline since November 2008.
Retailing-to-brewing conglomerate China Resources Enterprises (CRE) fell 4.2 per cent to HK$21.90. Developer China Resources Land slid 3 per cent to HK$16.26. Natural gas distributor China Resources Gas fell 2.7 per cent to HK$23, and China Resources Cement dropped 4.1 per cent to HK$5.82.
Last night China Resources Land said Wang Hongkun had resigned as an executive director and vice-chairman of its board for health reasons.
Wang had been vice-chairman of China Resources Land since June. He joined the company in 2011, having worked at the parent company since 1993.
In July, two mainland journalists accused Song of being the mastermind behind CRP's alleged overpayment for a basket of coal mining-related assets, which resulted in losses for the state and minority shareholders. The overpayment was said to amount to several billion yuan.
Song was replaced on Friday, a day after the Communist Party's Central Commission for Discipline Inspection said it was investigating Song for suspected serious party discipline and law violations - code for graft. Xinhua reported on Saturday that he had been sacked.
While details of the investigation are unknown, a state-run magazine yesterday highlighted links between Song and a shadowy coal tycoon.
Song reportedly oversaw a suspicious purchase of shares worth 8.1 billion yuan (HK$10.2 billion) from Shanxi Jinye Coal Group, owned by Zhang Xinming, according to the China Economic Weekly, which is affiliated with the Communist Party mouthpiece People's Daily.
Shanxi journalist Li Jianjun - one of the whistle-blowers accusing Song of taking bribes - yesterday said Xing Libin, the chairman of Shanxi's largest privately owned coal miner, Shanxi Liansheng Energy, was the middleman who introduced Zhang to Song.
Liansheng was a joint-venture partner of China Resources Power. According to CRP's official website, Liansheng and the state-owned energy firm jointly established China Resources Liansheng Investment with a registered capital of 3.8 billion yuan in 2009.
In addition to Song, the magazine linked Zhang to two other Shanxi officials facing graft probes.