Chang Xiaobing, the chairman of the state owned China Telecom, is currently undergoing major investigations made by the China anti-corruption watchdog. He is currently on the hot seat as he receives secret probes handled by regulators.
According to the statement made by China’s Central Commission for Discipline Inspection on Sunday, the chairman, who has occupied the seat of chairman and chief executive director at the telecommunications firm, is under strict investigations for “suspected serious disciplinary violations.” The term “disciplinary violations” is closely associated with the communist party and is a term likened to corruption.
China Telecoms confirmed in a regulatory filing that Xiaobing was undergoing investigations and that the business operations were going just fine. However, they refused to elaborate any further on the issue. China Telecom is the largest fixed telephone line provider in China and the third largest mobile operator. The shares of the firm traded two percent lower in Hong Kong. The 58-year-old Xiaobing served as the executive in China Unicom (the second largest mobile phone provider in the country) before moving on to his current position as chairman at China Telecom. Unfortunately, Xiaobing has become the newest catch in President Xi Jinping’s web of anti-corruption since the president took seat back in 2013.
The campaign to end corruption was believed by most experts to have died down, but due to the excessive market clash witnessed this summer, the campaign is back on its feet with a more forceful wave, creating a lot of investigations and putting the offenders in detention. The regulators are said to be “cracking down on alleged insider trading” and “rumor-mongering” according to a post made by CNN Money. This wave is hitting both private executives and state owned companies like China Telecoms.
According to Michelle Ma, a Bloomberg analyst based in Hong Kong, “The only concern now is if Chang’s successor turns out to be someone who isn’t able to keep the company running normally.” She went further to explain her worries, saying, “But this is unlikely to happen because the management structure at China Telecom and the whole Chinese telecommunications industry are well organized so any impact from any individual would be small.”
The telecommunications companies are not just the focus of the anti-graft investigators, as a probe into China Southern Airlines Co. Chairman Si Xianmin was announced last month. Also, we should not forget the Chairman of China’s biggest oil producer Petro China, who received a 16-year jail sentence for taking bribes and abusing his power.
The probe into Xiaobing came at a very bad time, when the industry is undergoing a revamp. The country’s wireless carriers, including China Mobile Ltd., agreed to make a transfer of about $35 billion of their individual network assets into a new company called China Tower Corp. and in exchange, get stakes in the infrastructure firm.
Chairman Xiaobing has become the highest ranking telecoms official to be mingled in a delicate probe situation since the former China Mobile Vice Chairman Zhang Chunjiang, who was reported back in 2011 to be receiving a suspended death sentence for the bribes he took.