HONG KONG, March 29 Shanghai-based Wison
Engineering Services Co Ltd, a PetroChina supplier which earlier
said its chairman had been arrested for alleged bribery, has
reported a hefty loss for 2013 and expressed uncertainty about
whether it can remain in business.
In its 2013 earnings report released on Friday night, Hong
Kong-listed Wison said its business was hurt after
Chinese authorities last year launched a corruption probe into
its chairman and founder Hua Bangsong.
Wison said authorities took away some company books and
records while banks are pushing it for immediate repayment of
loans, which "indicate the existence of material uncertainties
which cast significant doubt about the Group's ability to
continue as a going concern."
Shares in Wison have been suspended in Hong Kong since early
September, when the company said that Hua was helping
authorities with an investigation. On March 10, Wison confirmed
Hua had been arrested for "alleged bribery activity".
Wison, which has derived most of its revenue from PetroChina
in recent years, posted a loss of 514 million yuan ($82.74
million)for last year versus a net profit of 534 million yuan in
2012. It attributed the loss in part to the delay of a major
project originally scheduled for launch last year.
The company said it was seeking to bring in strategic
investors and was in talks with creditors to defer repayment of
loans. The statement said it defaulted on a 250 million yuan
loan late last year and banks wanted immediate repayment of 1.3
billion yuan in loans.
Last September, Wison said that Hua was assisting Chinese
authorities in an investigation. In late August, the Chinese
government announced a probe involving oil giant PetroChina
and its parent, China National Petroleum
Corp (CNPC). That announcement followed a pledge by President Xi
Jinping to crack down on corruption in China, which he said
threatened the Communist Party's survival.
After Chinese authorities announced their probe, shares of
Wison fell about 30 percent. Authorities haven't made any
subsequent announcement about the probe.
On Friday, Wison said "We have been unable to obtain further
information regarding the nature, scope and status of the
investigation and ascertain whether such investigation will have
any significant impact on the Group's financial position."
According to Wison filings with the Hong Kong stock
exchange, Hua founded the company in 1997 and built it into
China's largest private petrochemical contractor thanks largely
to revenue from PetroChina, one of the world's most valuable
On Friday, Wison said it remained hopeful about its
prospects as it has a backlog of coal-to-chemicals,
petrochemical and refining projects.
($1 = 6.2122 Chinese yuan)
(Reporting by Charlie Zhu; Editing by Richard Borsuk)