Millions of dollars in value wiped out in stocks tied to detention of CEFC’s founder Ye Jianming
Ye Jianming, chairman of CEFC China Energy, which owns a 14.16pc stake in Russia’s Rosneft, was detained for questioning
More than US$150 million in market value was wiped out of stocks in Hong Kong, Singapore and Shenzhen in companies closely related to Fortune 500 major, CEFC China Energy, as news that its chairman Ye Jianming was being investigated rattled investors.
Sources later confirmed that Ye had been arrested by Chinese authorities.
CEFC Hong Kong Financial Investment, the Hong Kong-listed subsidiary, plummeted 28 per cent to close at 57 Hong Kong cents, , resulting in a HK$372 million (US$48 million) loss in market capitalisation.
In Singapore, fuel-oil trader AnAn International, whose parent is majority owned by Ye, declined 8 per cent to end at S$0.069 , losing S$25.4 million (US$19 million ) in market value.
In Shenzhen, CEFC Anhui International Holding, in which CEFC China’s unit CEFC Shanghai International Group controls a 61 per cent stake, declined 4.5 per cent to 5.15 yuan. The stock’s market value shrank by 547 million yuan (US$86 million).
The rout came despite a statement from CEFC Anhui International Holding late morning on Thursday denying that it had any “direct relation” with Ye.
“Even though Ye Jianming is the chairman for CEFC China, which owns a stake in CEFC Shanghai International Group, he does not hold a position in our company and has no direct relation with us,” the statement said. “The company is running smoothly and the business continues as usual.”
Bond investors also reacted to the news. The Shanghai Stock Exchange said on Thursday morning that it would temporarily suspend the trading of 15Huaxin and 16Shenxin, the corporate bonds issued by CEFC Shanghai International because of “unusual fluctuations”. Both bonds had tumbled 34 per cent before the suspension.
CEFC China Energy ranked No 222 on the Fortune Global 500 in 2017, with revenues reaching US$43.7 billion. It ranked ahead of global corporate giants such as Coca-Cola, Goldman Sachs and Honeywell on the list.
According to official figures from the State Administration for Industry and Commerce, CEFC China Energy controls, or has invested in a wide range of banks, brokers, trusts, internet financing firms, energy companies, and resources trading platforms, including Hainan Bank, J&T Group, CEFC Shanghai Securities, Shenwan Hongyuan Securities, CEFC Futures, Nanhai Fund Management, Dashi Financing, Beijing Iron Ore Trading Center and Shanghai Guoneng Property Broker.
Last September, CEFC China Energy bought a 14.16 per cent stake in Russian oil giant Rosneft for US$9.1 billion, becoming the third-largest shareholder after the Russian government and BP in the world’s largest oil company by output.