* Shipper's vice-president has resigned
* Reports of ban on Wei leaving China baseless -COSCO Group
* COSCO shares slide nearly 7 pct in Hong Kong
* Latest anti-graft move comes ahead of key Party plenum
(Adds COSCO VP resigning in paras 2-3)
By Yimou Lee
HONG KONG/SHANGHAI, Nov 8 China's investigations
aimed at rooting out corruption have now extended to the
shipping industry, with China COSCO Holdings
saying that one of its top executives is
the subject of government inquiries.
COSCO, China's largest bulk shipping company, announced on
Friday that its vice president, Xu Minjie, had resigned - a day
after it said he was "under investigation by the relevant
authorities", phrasing used in China to describe corruption
The company's brief statement to the Shanghai stock exchange
on Friday said that there were no disagreements between Xu and
the board but gave no further details. The company did not
answer Reuters' calls seeking comment.
A former COSCO Group chairman, Wei Jiafu, has also been
prevented from leaving China, the Beijing Times said in a report
citing unidentified company sources that was reposted by the
official Xinhua news agency.
The reports of Wei having been banned from leaving China
were baseless, COSCO Group said in a statement on Friday, vowing
to comply with the country's anti-graft procedures. It declined
further comment on the matter.
COSCO shares fell by as much as 6.9 percent in Hong Kong on
Friday to nine-week lows and were set for their biggest one-day
fall since early July.
Chinese President Xi Jinping has identified corruption as a
threat to the ruling Communist Party's survival and has launched
a sweeping campaign against it, pledging to take on top-level
"tigers" and lowly "flies".
As part of that campaign, China launched a series of graft
investigations into the energy sector, announcing in August and
September that five former senior officials of the country's
biggest oil business, China National Petroleum Corp,
were under investigation for "serious discipline violations".
The latest move comes as the Communist Party leadership
prepares for a four-day plenum on Saturday to set a reform
agenda for the next decade, including the potential overhaul and
increased oversight of large state-owned enterprises (SOEs),
including the likes of COSCO.
China International Maritime Containers Group
, where Xu serves as a non-executive director, said
in a stock exchange filing on Friday that the investigation
"will not have material adverse impact" on the group because Xu
was not involved in daily operations.
A Chinese shipping industry website earlier reported Xu was
under investigation for corruption. The story was later removed
from the website, though other Chinese news portals continued to
Xu is believed to be one of the first big names from China's
shipping industry to be caught up in Xi's crackdown.
COSCO has been hit by a weakening global economy and a
glut of ships since early 2011. Though it appears to be on track
to return to profit this year, analysts have noted lingering
Its parent, COSCO Group, in July replaced Wei with its
president and director Ma Zehua amid a downturn in the global
COSCO last month reported a net loss of 1.04 billion yuan
($171 million) for July-September, according to Reuters'
calculations. The company, controlled by state-owned China Ocean
Shipping (Group) Co, has posted losses for two straight years. A
third year of losses would trigger a delisting from the Shanghai
COSCO Group Chairman Ma Zehua said in August that, with the
global dry bulk market improving in the second half, the company
was confident of turning a profit for 2013 after a narrower
first-half net loss.
COSCO has this year sold its logistics business, stakes in a
container manufacturer and office properties to try to return to
profitability. It also controls port operator and container
leasing firm COSCO Pacific.
($1=6.0927 Chinese yuan)
(Writing by Gabriel Wildau and James Pomfret; Additional
reporting by Keith Wallis in Singapore and Twinnie Siu in Hong
Kong; Editing by Ian Geoghegan and David Goodman)