Wison Engineering Says Chinese Police Arrested Billionaire Chairman

March 13, 2014 Leave a comment

Wison Engineering Says Chinese Police Arrested Chairman

Chinese Company Says Hua Bangsong Arrested on Bribery Allegations

WAYNE MA

Updated March 10, 2014 3:37 a.m. ET

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Hua Bangsong, founder and chairman of Wison Engineering Services at a news conference in Hong Kong in this Sept. 15, 2012, file photo. Reuters

BEIJING—Chinese police have arrested the founder and chairman of Chinese oil-engineering provider Wison Engineering Services Co. on allegations of bribery, the company said in a statement to the Hong Kong Stock Exchange.

In September, Wison said its chairman, Hua Bangsong, was “assisting” Chinese authorities in an unspecified probe and that authorities had seized records and frozen some of its bank accounts. Wison said at the time it was considering appointing an acting chairman but said earlier this year it had decided not to do so.

The company said in a statement late Friday that it was informed by a family member of Mr. Hua’s on Thursday that he had been formally arrested “over alleged bribery activity,” according to the company’s statement.

“The board hasn’t been informed of any detail of the allegation,” the statement read.

The company didn’t immediately respond to a request for additional information, and it wasn’t known whether Mr. Hua had a lawyer. Mr. Hua’s brother, Hua Bangshan, hung up on a reporter’s query for additional information.

Mr. Hua was one among several Chinese moguls and executives who disappeared from public view in 2013 as authorities targeted China’s oil industry as part of a sweeping antigraft campaign by President Xi Jinping. In addition to Mr. Hua, several senior oil-industry executives have also been detained.

They include onetime chief of China National Petroleum Corp., Jiang Jiemin. Mr. Jiang, who most recently served as head of the State-owned Assets Supervision and Administration Commission, was removed from his post and detained for what a government graft-fighting agency called “severe disciplinary violations.” The phrase is typically reserved for cases of alleged corruption.

Neither Mr. Jiang nor several of the other oil executives removed from their posts in recent months have been formally charged. None could be reached for comment since the investigation began.

Several of the current and former officials and oil executives detained since last year have had close ties to onetime senior Chinese leader Zhou Yongkang. Mr. Zhou retired from the Communist Party’s top decision-making body, the Politburo Standing Committee, in November 2012 as part of a generational change in leadership. Neither the government nor Communist Party has publicly accused Mr. Zhou or his family or wrongdoing.

Wison in September also said a finance manager at one of its subsidiaries was “assisting authorities” and couldn’t be reached. Since then, it has given no update about the status of the finance official, Zhao Hongbin.

Wison has long been dogged by speculation in the blogosphere that it grew on the back of a connection to Mr. Zhou’s family. Company executives have denied any link to the Zhou family.

In its latest statement to the Hong Kong Stock Exchange, Wison denied that Mr. Hua had been holding shares in the company on behalf of a person named Zhou Bin, the name also used by Mr. Zhou’s son. The statement described Mr. Hua as its single largest shareholder, representing roughly 78% of its issued share capital.

“Mr. Hua Bangsong does not hold any shares as nominee or on behalf of any other person,” the statement read.

Wison said media reports accusing the company of receiving “unlawful advantages” from an engineering contract related to a petrochemical project owned by PetroChina

Co.601857.SH +0.26% , the listed arm of state-owned China National Petroleum Corp., in Sichuan was “unsubstantiated and unfounded.”

Trading in Wison’s shares in Hong Kong have been suspended since September. Wison said in December that it expected to record a “significant loss” for 2013 due to stock options it granted to employees, foreign-exchange losses on the proceeds from its 2012 initial public offering in Hong Kong, salary costs for its growing number of workers and unspecified problems with new orders and projects. It said it was still assessing the financial impact of last year’s investigation by Chinese authorities.

 

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