Even as Cosco becomes confident it will achieve a full-year profit and avoid delisting, it was denying reports that former chairman Wei Jiafu was placed under travel restrictions, after one of its top executives resigned under a cloud of investigation.
Xu Minjie, executive director of China Cosco Holdings, resigned on Nov. 8 for “personal reasons,” according to the parent company, amid widespread reports that China’s anti-corruption campaign has spread to the shipping industry.
The news follows the marine freight transportation company’s Nov. 7 announcement that Xu is “under investigation by a relevant regulatory body,” without providing further details. Cosco Holdings said today that it “stands firmly behind the party and the country’s policy of anti-corruption investigations,” and welcomes the “public, news media and society at large scrutiny.”
The company’s board also said it “will assess the impact of the investigation on the group from time to time based upon the development of the investigation,” but does not expect the investigation will have “material adverse effect” to business. The company noted that it was told about the probe by its state-run parent company, China Ocean Shipping Group.
Xu is also executive vice president of China Ocean Shipping, vice chairman of China International Marine Containers Group Co. and chairman of Cosco Logistics, Bloomberg reports.
China Cosco Holdings recently expressed confidence that it will achieve its financial goals for 2013, which would help it avoid delisting from the Shanghai Stock Exchange. The company reported losses in 2011 and 2012 because of weakness in shipping markets.
Cosco shares fell in Hong Kong by nearly 7 percent on Nov. 8.
The probe comes after PetroChina removed four senior managers in August amid an investigation by authorities, signaling a broadening crackdown on corruption by China’s new leaders under President Xi Jinping.
“The anti-graft efforts by the new leadership is unprecedented,” said Hu Xingdou, a professor at the School of Humanities and Social Sciences at Beijing Institute of Technology, in a telephone interview with a Bloomberg reporter. “The investigations may help the leadership implement market-oriented reforms at state-owned enterprises that are monopolies at the moment.”
[Updated to include the company’s denial of reports regarding former chairman Wei.]