PetroChina supplier Wison says records seized, can’t contact chairman; Wison CFO Resigns as Bank Accounts Frozen in China Probe

September 20, 2013 Leave a comment

PetroChina supplier Wison says records seized, can’t contact chairman

8:45pm EDT

HONG KONG (Reuters) – Wison Engineering Services Co Ltd (2236.HK: Quote, Profile, Research, Stock Buzz), a supplier to PetroChina (601857.SS: Quote, Profile,Research, Stock Buzz)(0857.HK: Quote, Profile, Research,Stock Buzz), said Chinese authorities had taken company records and temporarily frozen some its bank accounts amid a widening probe into the giant oil producer and its parent, China National Petroleum Corp (CNPC).Wison also said it was no longer able to contact its chairman and founder, Hua Bangsong, who the company has said was assisting authorities in an investigation in China.

In a statement, Wison added that Zhao Hongbin, manager of the finance department of the company’s unit Wison Engineering Limited, was also assisting in the investigation.

Wison said it was not aware of the nature of the probe. In a separate filing to the Hong Kong stock exchange, Wison said executive director and chief financial officer, Chen Wenfeng, had resigned to pursue other business opportunities.

“As part of their investigations, the regulatory authorities made enquires about certain projects of the group, taken books and records and frozen certain bank accounts of the group,” Wison said in the statement.

“The company was not told the reason for freezing our bank accounts. After the company’s communication with the regulatory authorities, some of the frozen bank accounts have been released,” Wison said in the statement.

Wison said last week it would consider appointing an acting chairman.

Shares in Shanghai-based Wison – which has derived most of its revenue from PetroChina in recent years – have been suspended in Hong Kong since early September, when the company first said Hua was helping authorities.

They had fallen 30 percent after the Chinese government announced the investigation into several former top executives at PetroChina and CNPC in late August.

According to Wison’s filings with the Hong Kong stock exchange, Hua founded the company in 1997 and built it into China’s largest private petrochemical contractor thanks largely to revenue from PetroChina, one of the world’s most valuable energy firms with a market capitalization of about $240 billion.

Wison CFO Resigns as Bank Accounts Frozen in China Probe

Wison Engineering Services Co. (2236), supplier to PetroChina Co., said China’s authorities froze certain bank accounts and that its chief financial officer resigned, as investigations into company executives continue.

The oil services company said CFO Chen Wenfeng resigned “to pursue other business opportunities,” according to a statement to the Hong Kong stock exchange last night. In a statement today, Wison said regulators asked about “certain projects,” took records and froze bank accounts, some of which have since been unfrozen.

The company wasn’t given reasons for stopping its bank accounts, it said in the statement. Its chairman and founder Hua Bangsong and a manager in a subsidiary’s finance department, Zhao Hongbin, are still assisting authorities with their investigations, it said.

Wison said on Sept. 3 that Hua was helping in unspecified investigations, a day after its shares plunged 16 percent and were suspended from trading. China is investigating PetroChina Co. (857)’s former Chairman Jiang Jiemin and four senior executives for graft. The nation’s largest oil producer was Wison’s biggest customer before 2012.

“Hua is not contactable and he is not able to discharge his daily duties in relation to the group’s business operation and administration,” Wison said in today’s statement. “The company is still liaising with the regulatory authorities, assessing the impact of the investigations on its normal operation and taking actions to manage cash-flow and risks.”

Wison’s revenue from contracts with PetroChina was around 111 million yuan ($18.1 million), or 5.6 percent of its revenue, in the first half of 2013, according to a statement on Sept. 13. Outstanding contracts with PetroChina amount to around 204 million yuan, it said.

Wison didn’t say when its shares will resume trading.

To contact the reporter on this story: Aibing Guo in Hong Kong at aguo10@bloomberg.net

Filed under Investing Process, Macro Trends

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