US probe of JPMorgan claims victim in top official
The recent series of foreign government probes into their companies’ China business practices has claimed its first major victim, with word that the local investment banking chief of JPMorgan (NYSE: JPM) will retire from the company. There’s no direct evidence that the departure of longtime JPMorgan executive Fang Fang is related to the ongoing US probe against his company’s China hiring practices. But of course everyone is speculating that’s the case. The development looks like a positive one, as it sends a message that foreign companies intend to change the way they do business in China, and I expect we could see some other similar executive shuffles in the months ahead. Read Full Post…
Shenzhen Airlines officials sentenced for fund misuse
China’s recent wave of anti-corruption probes at big state-owned firms is moving in another new direction, with word that 6 officials at regional carrier Shenzhen Airlines have been found guilty and sentenced for misappropriating funds. This particular case represents a new wrinkle in the recent wave of probes because it involves corruption through the use of business shenanigans, rather than direct bribes and embezzlement that have been the focus of most investigations so far. At the same time, Chinese graft investigators are getting some moral support from abroad, with word that Britain’s anti-corruption watchdog has received more funds for its own investigation of Rolls-Royce (London: RR) related to the luxury car maker’s activities in China and Indonesia. Read Full Post…
We’re just a week into the New Year, and already new signs of political shenanigans at the nation’s 2 leading wireless telcos, China Mobile (HKEx: 941; NYSE: CHL) and China Unicom (HKEx: 762; NYSE: CHU), are hinting at turbulence ahead as Beijing tries to liberalize the state-dominated telecoms services sector. Media are reporting that China Mobile has launched an internal probe into a botched initiative in Hong Kong, which looks to me like an extension of Beijing’s fast-expanding series of anti-corruption probes at major state-owned firms. Meantime, media are reporting separately that a top Unicom executive has left the company to joint one of the nation’s newly licensed virtual network operators (VNO), in a deal that looks aimed at undermining Beijing’s plans to inject new competition into the telecoms services sector. Read Full Post…
The accelerating anti-graft campaign in China could be entering a new phase, with word that Britain’s anti-corruption watchdog has formally launched an investigation into jet engine maker Rolls-Royce. The move marks the latest investigation of a major foreign firm related to its China operations, as Beijing itself engages in an increasingly aggressive campaign to root out corruption at state-owned enterprises. While this latest investigation is certainly a welcome development in the drive to clean up China’s business environment, the acceleration of the broader campaign could also create major disruptions in the country’s business world over the short-term. Read Full Post…
China’s ongoing anti-graft sweep continues to gain momentum as we approach the end of the year, with major new developments in the headlines from British drugmaker GlaxoSmithKline (GSK) (London: GSK) and domestic energy giant PetroChina (HKEx: 857; Shanghai: 601857; NYSE: PTR). In the former case, GSK is taking the revolutionary step of saying it will no longer pay doctors anywhere in the world to promote its products. In the latter, media are reporting that another top PetroChina official has been detained and resigned as he assists with ongoing investigations of corruption at the state-run giant. Read Full Post…
In a development that many would say was widely expected, Beijing’s recent campaign to root out official corruption at state-owned companies is spreading deeper into the system, with word that an executive from grocery chain operator Lianhua Supermarket (HKEx: 980) is under investigation. I don’t normally follow Lianhua, as it’s a distinctively second-tier company that operates unimpressive grocery stores that are usually mostly empty whenever I happen to shop there. But that’s exactly why this particular probe is interesting, as it shows that the anti-corruption campaign is moving beyond the high-profile biggest state-run companies that have been targeted so far and into the smaller firms that populate the big majority of China’s corporate landscape. Read Full Post…
I don’t know if I’m the only one who noticed this, but the flurry of attacks on foreign companies that began quite suddenly during the summer has ended just as quickly, replaced by what looks like a longer-term series of investigations against high-level officials at major state-owned firms. This second wave of attacks is obviously much more politically sensitive since it targets well-connected local Chinese officials, many of them high-ranking executives at some of the country’s leading state-run firms. Sensing that this anti-foreign campaign has now officially passed, visiting UK Prime Minister David Cameron has become a vocal supporter of GlaxoSmithKline (GSK) (London: GSK), the British drugmaker that was at the center of one of the biggest attacks against a multinational during the summertime campaign. Read Full Post…
The ongoing crackdown against corrupt officials at major state-owned enterprises continues to pick up momentum, with word that a top official at aluminum giant Chalco (HKEx: 2600) has resigned after being targeted in a probe. News of this latest probe comes at the same time another former high-level executive from leading telco China Mobile (HKEx: 941; NYSE: CHL) has just been formally sentenced to life in prison after his own trial for corruption. Other major state-owned enterprises whose top executives have become targets of recent corruption probes include that oil giant PetroChina (HKEx: 857; Shanghai: 601857; NYSE: PTR) and shipping leader Cosco (HKEx: 1919; Shanghai: 601919). Read Full Post…
