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Eric Ng

Shares in China Resources Power dropped as much as 5.5 per cent after it was announced that the temporary suspension of president Wang Yujun, under criminal detention on corruption allegations, had been made permanent.
The stock ended the morning session on Monday at HK$22.60, down from Friday’s close of HK$22.90. It shed 5.5 per cent to HK$21.65 soon after the market opened.
CR Power is the power generation subsidiary of state-owned retailing-to-energy conglomerate China Resources (Holdings).
“The market’s reaction is bigger than expected, given news that he has been under investigation was already announced last month,” said Evan Li, the head of renewables and utilities equities research at Standard Chartered. “It probably reflects investors’ worries about other potential executives being caught up in Beijing’s anti-corruption campaign.”
President Xi Jinping’s unprecedented anti-graft campaign has seen hundreds of senior government officials and state enterprise executives detained to assist investigations into alleged corruption.
Former CR Power chairmen Song Lin and Wang Shuaiting have been detained to assist graft probes in recent months.
Shareholder activist and former journalist Li Jianjun has accused Song of being the mastermind behind alleged “intentional” overpayment by CR Power for a basket of Shanxi coal-mining and related assets in a deal struck in 2010.
A person familiar with the situation told the South China Morning Post that CR Power would seek to resolve the problematic deal, which has still not been completed since some terms of the acquisition – including the receipt of valid mining licences – had not been satisfied, by “legal means”.

	It probably reflects investors’ worries about other potential executives being caught up in Beijing’s anti-corruption campaign

	Evan Li, Standard Chartered research head
Shanxi tycoon Zhang Xinming, the assets’ seller, was detained early last month to assist investigations, sources told the Post.
It is not immediately clear whether allegations against Wang have anything to do with the deal. He was in charge of the firm’s coal-mining operations.
CR Power said on Sunday night that Wang had resigned from his president and executive director positions with effect from Monday, as he “is in criminal detention on charges of corruption and bribery by the People’s Procuratorate of Zhenjiang municipality, Jiangsu province”. He also resigned from all of his roles and duties in “relevant” subsidiaries of CR Power.
Chairwoman Zhou Junqing would assume the role of president until a suitable replacement had been found, CR Power said.
Late last month, the company said Wang had been “temporarily suspended” after being placed under investigation by the “relevant people’s procuratorate in Jiangsu”, without specifying the nature of the allegations against him.


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China Resources Power

Wang Yujun has resigned from his president and executive director positions at China Resources Power with effect from Monday. Photo: Felix Wong

New | China Resources Power drops after president’s departure amid graft probe