J&T faces risk of tougher penalties, higher costs as China opens formal safety probe

China’s postal regulator has opened an investigation into J&T Express over failures in safety management, escalating scrutiny of the courier operator and raising investors’ concerns about the impact of heavier penalties, higher compliance costs and safety oversight on its international operations.

The State Post Bureau said on Thursday it had formally launched a case against J&T Express Co after multiple work process safety accidents occurred this year at enterprises using the J&T brand, business name and delivery waybills.

Shares of Hong Kong-listed J&T Global Express slumped as much as 11.5 per cent to HK$7.85 after the announcement, before trimming losses to close at HK$8.35, down about 5 per cent on Thursday.

The regulator said repeated inspections had uncovered safety hazards at operational sites and accused J&T of failing to adequately oversee safety management across related entities. It said the company had not implemented unified safety protection measures as required.

The probe marked a “significant escalation” from previous warnings and small fines, according to Yi Zhang, founder and analyst at iiMedia Research.

“This is a formal administrative enforcement process that targets headquarters-level management responsibility,” Zhang said. J&T could face substantial fines or operational rectification orders if violations were confirmed, he added.

J&T China, the group’s mainland branch, said in a statement on Thursday that it “sincerely accepted” the investigation and would take it as a “profound wake-up call” and fully cooperate with regulators. The company acknowledged the shortcomings in its oversight of some enterprises operating under the J&T brand and said it had established a special task force to conduct safety inspections and rectify risks.