The ongoing crackdown against corrupt officials at major state-owned enterprises continues to pick up momentum, with word that a top official at aluminum giant Chalco (2600.HK ) has resigned after being targeted in a probe. News of this latest probe comes at the same time another former high-level executive from leading telco China Mobile (0941.HK ; NYSE: CHL) has just been formally sentenced to life in prison after his own trial for corruption.
Other major state-owned enterprises whose top executives have become targets of recent corruption probes include that oil giant PetroChina (0857.HK ; Shanghai: 601857; NYSE: PTR) and shipping leader Cosco (1919.HK ; Shanghai: 601919).
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.
Let's start with a look at Chalco, which has announced that former vice president Li Dongguang has resigned  from his post after coming under investigation. No reason was given for the investigation, but suspicion of corruption is almost always the reason in this kind of case. Li looks quite typical of the kind of executive I described above, working at a range of research institutes and other metals-related companies before landing in his spot as vice president at Chalco, the nation's largest aluminum producer.
Meantime at China Mobile, media are reporting that former vice president Lu Xiangdong's corruption trial has formally ended with a life prison sentence . Like Chalco's Li, Lu did stints at various telecoms-related government offices before becoming a China Mobile vice president in 2000. A judge determined he accepted more than 20 million yuan (HK$25.6 million) in bribes. This latest China Mobile probe comes just three months after another China Mobile executive, Xu Long, also came under investigation  for bribery and corruption charges.
This series of probes into corruption at big state-owned companies first began late this summer, and followed another series of high-profile investigations at foreign companies. One of those earlier campaigns saw foreign milk powder makers accused of price fixing, and foreign pharmaceutical firms accused of bribing doctors and health professionals to buy their drugs.
That earlier series mostly targeted companies rather than individual executives. By comparison, this current campaign at state-run enterprises seems squarely aimed at corrupt officials and not at common company practices. This latest campaign also seems set to last longer, unlike the wave of foreign probes that lasted two or three months and then quickly subsided. As I said above, this clean-up probably isn't much cause for concern for investors, and could even be a positive development if it means Beijing will let these corporate giants behave more like real commercial companies and less like organs of the state.
Bottom line: 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.
To read more commentaries from Doug Young, visit youngchinabiz.com