China Resources Audited Following Allegations

China Resources, a state-owned conglomerate and Fortune 500 company, is currently being audited following allegations from a journalist of corruption by senior executives. From China Daily:

China Resources is currently being audited. The State-owned Assets Supervision and Administration Commission will act according to the auditing results, the commission said in a brief statement.

The commission vowed to severely punish people who are held accountable according to law if any illegal practices and irregularities are found.

In a statement posted on the Internet on Wednesday, a journalist accused Song Lin, chairman of China Resources, and other senior executives of corruption and wrongdoing that led to the loss of billions of yuan in State-owned assets.

[…] China Resources Power was part of a joint venture that paid 7.9 billion yuan ($1.29 billion) for an 80 percent stake in Shanxi Jinye, which was valued by another company at no more than half of the price paid a few months before the deal’s completion, Wang said on his micro blog. [Source]

Last week, journalist Wang Wenzhi of Economic Information Daily, affiliated with Xinhua News Agency, used his Sina Weibo account to accuse China Resources chair Song Lin and other executives of corruption and wrongdoing. From the South China Morning Post:

“I’m levelling allegations against Song Lin because he is the chief culprit,” Wang told the South China Morning Post yesterday. “He’s the mastermind behind many shady decisions.

“I received the relevant material from someone and decided to take it into my own hands. I spent about half a year investigating it, including several visits to Shanxi.”

Wang accused Song of intentionally buying “poor-quality coal assets” in Shanxi province at an “incredibly” high price and paying the money in advance at irregular intervals, a practice he said may have caused the group to suffer billions of yuan in losses.

Subsidiary China Resources Power (CRP) was part of a joint venture that paid 7.9 billion yuan (HK$9.9 billion) for an 80 per cent stake in the Shanxi Jinye Coal coking group that another party valued at half that price months before the deal, Wang said on weibo. [Source]

China Resources has denied the accusations. From Global Times:

The many speculations, assumptions and even vicious defamation in recent coverage and the so-called whistle-blowing have caused an undesirable impact on the reputation of the company and the leaders, said a statement on the company’s website.

“China Resources operates normally by strictly adhering to laws and regulations. All its business activities are in the interests of shareholders and the public interest. If media and the public find malpractice in the acquisition, they are welcome to provide evidence to the company and its supervisor,” read the statement.

The company also reserves the right to call to account anyone who libeled or defamed it and ask for economic losses, said the statement. [Source]

Following his weibo post, Wang has reportedly received threatening phone calls, Want China Times reports:

In an interview with the Hangzhou Daily Press, Wang clarified that he had not deleted his posts and that on July 17 he had received two anonymous phone calls. “They told me to watch out for my personal safety and they did not sound friendly,” he said.

The journalist said further that he has more evidence related to the case and will continue to reveal information on Weibo.

Wang said he knows “there is a possibility that I will be persecuted. I’m not afraid, but I know I’m doing something controversial,” he added.

In addition to Wang’s charges against Song, six minority shareholders of China Resources Power, a Hong Kong-listed subsidiary of China Resources, announced at a press conference July 18 that they had filed a lawsuit against Song and other senior executives, accusing them of mishandling company assets and overpaying in the acquisition of coal mines in Shanxi province. The trial is scheduled to start on Aug. 5 in Hong Kong. [Source]

Global Times has published a special webpage on the case with updates and links to editorials from various Chinese media.


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