China Telecom Chairman Detained in Graft Probe

China Telecom Chairman Detained in Graft Probe

Chang Xiaobing, the chairman of Corp.—the country’s third largest mobile operator—has been detained as part of a crackdown on graft in state-owned corporations. China-Wei Yap reports for the Wall Street Journal:

Mr. Chang was detained on suspicion of “severe disciplinary violations,” according to a one-sentence statement posted Sunday on the website of the Central Commission for Discipline Inspection, the Communist Party’s top anticorruption agency. The phrase is the agency’s byword for corruption allegations.

The statement said Mr. Chang, 58 years old, is the former chairman of the country’s second-largest mobile operator Ltd. He assumed the top post at China Telecom in August.

The commission didn’t provide further details. A telephone message left at the communications office of China Telecom’s Hong Kong offices went unanswered. In a filing on Sunday, the company said its operations remain normal. [Source]

See a brief report from Xinhua on the detention.

Joanna Plucinska at TIME has more on the case:

Chinese media outlets reported Chang Xiaobing as “missing” on Sunday, according to Reuters.

The Hong Kong–based newspaper South China Morning Post said Chang was being investigated for alleged graft when he was the chairman of another state-owned telecommunications enterprise, China Unicom, which he left in August to take over China Telecom.

Chang declared earnings of less than $1,200 per month after tax at China’s National People’s Congress in March, according to the Post. [Source]

The SCMP article quoted above, by Daniel Ren, puts Chang’s detention in the context of the broader crackdown on state-owned enterprises:

Dozens of senior SOE officials in the petrochemical, coal and telecom sectors have been investigated since late last year.

The CCDI started a new round of investigations into major SOEs in November, 2014.

A month later, two Unicom officials, Zhang Zhijiang, a general manager responsible for network construction, and Zong Xinhua, who oversaw e-commerce, were taken away by the CCDI for allegedly “serious violations of discipline”.

Investigators also reported back in February that some Unicom officials committed a series of wrongdoings, including colluding with vendors to make illegal incomes; taking advantage of their positions to help relatives secure big contracts; and accepting valuable “gifts” such as shares of companies from clients.

One businessman whose company provides services to China Telecom said the investigations into Chang could affect morale in the industry and delay planned reforms as more scandals came to light. [Source]

Six executives from Citic Securities Co., one of China’s biggest securities companies, were reported missing earlier this month. At the same time, the chairman of the private conglomerate Fosun Group was reportedly questioned as part of a corruption probe, but then was later allowed to travel to the U.S. and Canada on business.

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