Corruption case causes China Telecom shares to fall

The value of China Telecom’s shares has dropped as much as 9 percent after revelations about head of the company being under investigation as the latest high-profile target in a corruption crackdown.

The firm, which is one of China's big three telecommunications companies, saw its shares trade as low as HK$3.62 ($0.47) on Hong Kong's stock market on Monday compared to the previous closing of HK$3.73, AFP reported.

As market closed on Monday, the drop narrowed to 1.34 percent, with the shares ending at HK$3.68.

The probe into the conduct of China Telecom’s boss, Chang Xiaobing, for "severe disciplinary violations" was announced by the Central Commission for Discipline Inspection, the disciplinary watchdog of China’s ruling Communist Party.

According to experts, “severe disciplinary violations” is usually euphemism for graft.

Little information was given about the nature of the investigation involving Chang, but the statement released by the Central Commission for Discipline Inspection mentioned his position as the former chairman of the country's second-largest mobile operator China, Unicom.

The 58-year-old became the chairman at China Telecom in August despite reports earlier this year that the government was considering merging the two telecom giants.

According to an article published in China’s respected business magazine, Caijing, Chang has been "taken away."

The article added that he disappeared just days before a meeting of the state-owned company, which was planned for December 28.

The magazine further stated that Chang's phone has been switched off and he has not responded to multiple calls.

"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.

Wong added that investors are currently moving cautiously waiting for further details about the corruption probe.

Chinese authorities have been carrying out a hard-hitting campaign against allegedly crooked officials since President Xi Jinping took office in 2013, a campaign, which has been described by some experts as a political purge.

The government's ongoing anti-corruption drive resulted in more than 70 senior officials at state firms being investigated in 2014.

China’s financial sector came under the spotlight as a result of which several high-level executives were reportedly hauled in after a major turbulence in the country’s stock market this summer.

Billionaire Guo Guangchang, which was considered as China's Warren Buffett, disappeared from public view earlier this month amid reports he had been detained by police in Shanghai.

He was briefly seen afterwards, but his conglomerate flagship, Fosun, later confirmed that the 48-year-old was "assisting in certain investigations" by Chinese authorities.

Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.co.uk