Daily Management Review

Anti Graft Agency Investigates China Telecom Chairman for Disciplinary Violations


Anti Graft Agency Investigates China Telecom Chairman for Disciplinary Violations
In the latest high-profile target in a corruption crackdown in China, the head of China Telecom, one of the nation’s big three telecoms firms, is under investigation for “severe disciplinary violations”.
A statement on the website of the Central Commission for Discipline Inspection, the watchdog of the ruling Communist Party announced the news about the probe into Chang Xiaobing who is now 58 years of age.
The term is normally a euphemism for graft. 
A well respected business magazine Caijing reported that Chang had been “taken away” for investigations. The article in the magazine added that the telecom boss had disappeared just days before a meeting of the state-owned company planned for December 28. 
The report further stated that the telecom authorities issued a memo on the evening of December 26 saying that the meeting would be postponed. Reports also said that Chang’s phone was switched off and he had not responded to multiple calls.
Beijing had announced Chang would head China Telecom in August this year, after 11 years as chairman and party secretary of China’s second largest telecoms provider China Unicom. The magazine report said that the decision was made despite widespread rumors that the executive was under investigation. 
An imminent tie-up between the two industry leaders and the third major player, China Mobile were sparked off by the decision to make Chang the head.
China was considering merging scores of its biggest state-owned companies to create around 40 national champions from the existing 111, the state news agency Xinhua had reported in April.
Since President Xi Jinping took office in 2013, a crusade has been initiated that some experts have called a political purge and authorities have been pursuing a hard-hitting campaign against allegedly crooked officials.
After authorities pledged they would turn their efforts to the state-owned enterprise system, several high-profile business leaders have been caught up in the web of graft investigations. The state-owned enterprises are considered to be hotbeds of graft that has resisted multiple attempts at reform. 
The campaign is seen as an attempt to reducing resistance to structural reforms intended to bolster the slowing economy by forcing executives of state firms, who jealously guard their prerogatives, to toe the party line.
While Chang was still at China Unicom, Beijing announced it had begun investigations into the country’s telecom industry earlier this year.
The Communist Party can punish alleged offenders internally or expel them and pass them on to courts for trial, where conviction is virtually guaranteed, after conducting an internal graft investigation.
The state-owned energy companies are also under the investigators’ radar among other sectors that Beijing is probing into.
Zhou Yongkang, the highest ranking official to be convicted of corruption during the current campaign, had been the head of the country’s oil companies for a long time.
The financial sector had been in the vision of the party’s inquisitors in most recent times where several high-level executives were detained after a stock market rout this summer. 
This is not the first wave of investigations to hit the telecoms industry. 
Mid-level executives and above were forced to surrender their passports as the country also probed the top three telecoms operators in 2010 and 2011.