China Telecom chief resigns over corruption probe

The chairman of China Telecom has formally resigned his posts after his conduct at the company came under investigation as part of Chinese government’s sweeping crackdown on corruption.

According to the company sources on Wednesday, Chang Xiaobing’s resignation came three days after Chinese authorities announced he was under investigation, AFP reported.

Issuing a statement on Wednesday, China Telecom announced that Chang has resigned as chairman, chief executive officer and executive director. The statement was addressed to the Hong Kong stock exchange, where the company is listed.

The ruling Communist Party’s internal supervisory watchdog, the Central Commission for Discipline Inspection, said on Sunday that Chang was being investigated for “severe disciplinary violations.” Experts believe that “severe disciplinary violations” is usually euphemism for graft and corruption.

According to business magazine, Caixin, Chang has been taken into custody and his “problems” are mostly related to the period when he headed China Unicom, another one of the country’s three major telecom companies.

Chang was appointed chairman of Unicom before leaving the company to join China Telecom in September despite reports earlier this year that the government was considering merging the two telecom giants.

“China Unicom executives accepted money and sex in return for influencing matters such as contract negotiations with suppliers and personnel promotions,” the magazine reported, but did not specify if Chang has been personally involved.

As a result of the revelations, China Telecom shares closed down more than one percent on Wednesday.

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.