The chairman of China Telecom, Chang Xiaobing, is the latest high-profile figure to be detained and investigated as part of president Xi Jinping’s ongoing corruption crackdown.
According to Caixin, Chang disappeared on December 26. He had taken the top job as chairman and party boss at China Telecom in September, but the investigation concerns his 11 year tenure as the head of China Unicom.
In a statement released by The Central Commission for Discipline Inspection (CCDI), the Communist Party’s anti-graft agency, Chang is being investigated for “severe disciplinary violations,” a typical euphemism used by the agency for graft.
A number of Chang’s former subordinates at China Unicom have also been taken into custody. China Telecom employees said that senior figures at several of China Unicom’s regional headquarters were told on December 26 that an annual meeting scheduled to be held in the capital on December 28 had been cancelled.
“It’s a very important annual meeting, and heads of the company’s regional headquarters and senior officials from the Ministry of Industry and Information Technology usually attend,” said one China Unicom executive. “Many people believe that something very bad must have happened because the cancellation was so abrupt and no reason was offered.”
CCDI investigators conducted a month-long investigation of China Unicom in December of last year. In a report published two months later, it is alleged that China Unicom executives accepted money and sex in return for influencing matters such as contract negotiations and personal promotions,
Some executives were also alleged to have helped companies associated with relatives and friends win contracts from China Unicom. Chang, however, was not named in the report.
At least two of Chang’s former subordinates at China Unicom, including Zhang Zhijiang, who oversaw development of the company’s 3G and 4G networks, have already been taken into custody over corruption allegations.
Following the disappearance of Chang, shares in China Telecom dropped by 3%, with shares trading at HK$3.69 compared to the previous closing of HK$3.73. According to financial analyst Jackson Wong, investors are moving cautiously pending further details of the probe.
Chang joins the ranks of disappearing businessmen who are being investigated by the CCDI for graft. Guo Guangchang, often referred to as China’s Warren Buffett, has disappeared and reappeared several times over the course of the month under mysterious circumstances.
By Mary DeMay