Advertisement

PetroChina supplier Wison faces bribery charges, shares plummet

By Charlie Zhu and Donny Kwok

HONG KONG (Reuters) - Wison Engineering Services Co Ltd <2236.HK>, a supplier to scandal-hit PetroChina <0857.HK>, said it was facing bribery charges following an investigation by the Chinese government, sending its shares plunging 50 percent.

Charges have been filed against the company and its chairman, Hua Bangsong, alleging that they had been involved in "the offering of unlawful advantages," Wison said in filing late on Wednesday.

The charges come after Wison said in September 2013 that authorities had seized records and temporarily frozen some of its bank accounts. It said at the time that it was not able to contact Hua, who holds more than 78 percent of the company.

Wison said on Wednesday it has been in touch with Hua through his lawyer.

Shares in Wison, which were trading for the first time on Thursday since being suspended in September last year, lost half their value to change hands at HK$0.98.

The charges allege bribery of a senior manager at one of Wison's customers relating to a property valued at 7.62 million yuan ($1.2 million) in 2009 and also focus on irregularities during a tender process in 2004 for a project that generated revenues of 69 million yuan, Wison said.

Wison said it is consulting its legal advisers in China regarding the charges. Reuters was not able to contact Hua or his lawyer for comment.

Project tendering in China has been riddled with graft amid a culture of officials at state firms accepting bribes to award contracts to companies run by relatives or friends, industry watchers say.

The charges come at a time when Wison's main customer PetroChina <601857.SS>, the country's dominant oil and gas producer, and its parent China National Petroleum Corp (CNPC), are at the centre of one of the biggest corruption investigations into the Chinese state sector in years.

Authorities have detained about a dozen PetroChina and CNPC senior executives in the sweeping corruption crackdown launched by Chinese President Xi Jinping two years ago.

There was no mention of PetroChina in relation to bribery in the Wison filings.

Hua founded Wison in 1997 and built it into China's largest private petrochemical contractor mainly due to revenue from PetroChina, one of the world's most valuable energy firms, company statements have said.

Wison fell into the red last year with a net loss of 514 million yuan.

(Editing by Anne Marie Roantree and Edwina Gibbs)