Shares in China Telecom dropped as much as 3% on Monday after the state-owned company’s chairman became the latest high-profile target of Beijing’s corruption crackdown.
The firm, one of China’s big three telecoms operators, saw its shares fall in Hong Kong after it emerged that Chang Xiaobing was being investigated for “severe disciplinary violations”.
The wording used in the announcement by China’s central commission for discipline inspection, the watchdog of the ruling Communist Party, is normally the euphemism for corruption.
Chang had been “taken away”, according to an article in the respected business magazine Caijing, adding that he disappeared just days before a meeting of the state-owned company planned for Monday.
Chang’s phone was switched off and he had not responded to multiple calls, it added.
“Since last year, when the authorities were probing oil companies, we knew they would be doing this for other sectors. Now it’s telecoms,” financial analyst Jackson Wong from the brokerage firm Simsen Financial group told AFP.
The shares traded were down 3% in early trade in Hong Kong but the drop had narrowed to 1% by the lunch break, with shares trading at HK$3.69.
Wong said investors are moving cautiously pending further details of the probe.
Authorities have been pursuing a hard-hitting campaign against allegedly crooked officials since Xi Jinping became president in 2013, a crusade that some experts have called a political purge.
After a stock market rout this summer, the nation’s financial sector was under the spotlight with several high-level executives reportedly being hauled in.
Billionaire Guo Guangchang, dubbed China’s Warren Buffett, disappeared from public view earlier this month amid reports he had been detained by police in Shanghai.
He briefly resurfaced afterwards but his conglomerate flagship, Fosun, confirmed the 48-year-old was “assisting in certain investigations” by Chinese authorities.
This is not the first wave of investigations to hit the telecoms industry.
The country also probed the top three operators in 2010 and 2011, forcing mid-level executives and above to surrender their passports.
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