Stocks slide further despite CEFC slamming reports of probe into chairman Ye Jianming

CEFC China Energy brands media reports “irresponsible” and says it’s business as usual, but stock rout in Greater China won’t abate

PUBLISHED : Friday, 02 March, 2018, 2:00pm
UPDATED : Friday, 02 March, 2018, 11:22pm

Stocks tied to CEFC China Energy continued to slide on Friday in China and Singapore, despite the company slamming news reports that its chairman, Ye Jianming, is under investigation.

Ye had been arrested by Chinese authorities, sources said on Thursday. The news triggered a stock and bond rout in firms tied to the energy giant in Shanghai, Shenzhen, Hong Kong, and Singapore, leading to a loss in equity market value of more than US$150 million and the suspension of five corporate bonds.

CEFC China Energy, a Fortune 500 major and the third largest shareholder of Russia’s Rosneft, issued a statement on Thursday night saying media reports about Ye were “irresponsible”, but without specifically confirming or denying whether he was being investigated.

We hereby solemnly declare: the reports have no basis in fact and were not verified with or agreed by Ye and us
CEFC statement

“So far CEFC China Energy’s business is continuing as normal,” the company said.

“We’ve noticed some irresponsible media reports today about Ye Jianming. We hereby solemnly declare: the reports have no basis in fact and were not verified with or agreed by Ye and us.”

Separately, fuel-oil trader AnAn International, whose parent is majority owned by Ye, said late on Thursday that it will “closely monitor” the impact of the news reports about Ye on the company.

AnAn said it purchases crude oil, refined petroleum products, and petrochemical products for CEFC Shanghai International, a CEFC China unit.

The statements did not stop the stock rout continuing for a second day.

In Shenzhen, CEFC Anhui International Holding, in which CEFC Shanghai International Group controls a 61 per cent stake, sank 3.9 per cent to close at 4.95 yuan. On Thursday, CEFC Anhui declined 4.5 per cent, losing 547 million yuan (US$86 million) in market value, although the company denied earlier in the morning that it had any “direct relationship” with Ye.

In Singapore, AnAn International dived as much as 31 per cent, before closing down 7.3 per cent at S$0.064, following an 8 per cent plunge on Thursday.

Meanwhile, CEFC Hong Kong Financial Investment, a Hong Kong-listed subsidiary, recovered some gound, finishing up 1.8 per cent at 58 Hong Kong cents, having plunged 28 per cent in the previous session.

In the bond market, CEFC Shanghai International said on Thursday afternoon it would suspend the trading of five corporate bonds on the Shanghai stock exchange after wild fluctuations earlier in the day. Two of CEFC Shanghai International’s bonds had both tumbled more than 30 per cent before the suspension.

CEFC China Energy ranked No 222 in the Fortune Global 500 in 2017, with revenues reaching US$43.7 billion. It was placed ahead of global corporate giants such as Coca-Cola, Goldman Sachs and Honeywell on the list.

According to official figures from China’s 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. They include 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 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.