July 17, 2013 / 6:06 AM / 4 years ago

China Resources Power shares tumble on graft accusations

HONG KONG, July 17 (Reuters) - Shares in China Resources Power Holdings Co Ltd tumbled as much as 10 percent on Wednesday in what brokers said was a response to comments in Chinese media alleging corruption in the state-run electricity producer.

Shares of the company plunged to a day low of HK$17.94 before recovering slightly to HK$18.22 in early afternoon. Nearly 22 million shares changed hands, making it the most active counter on the exchange on Wednesday.

The company told the Hong Kong exchange that it was unaware of any reason for the fall in the share price.

Several Hong Kong traders linked the fall to widespread Chinese media reports citing a Chinese journalist affiliated with the official Xinhua news agency who alleged that some China Resources executives made the company incur hefty losses when it took over a coal mine in 2010, and they were suspected of corruption.

“It is because of the Xinhua report,” said Peter Yao, an analyst with BOCI Reseach. “It is having a big impact on its share price today.”

The journalist and China Resources Power could not be immediately reached for comment.

A report posted on Xinhua’s website and on Chinese twitter-like Weibo feed has the journalist, identified as Wang Zhiwen, accusing the executives of “intentionally causing a loss of billions of yuan of state-owned assets” through the acquisition.

The report - which was picked up by numerous Chinese media and news portals - along with the full submission the journalist made to the Chinese Communist Party’s disciplinary authority, was later removed from Xinhua but is still visible on Weibo.

In May, China Resources Power announced that it plans to merge with sister company China Resources Gas Group Ltd , a natural gas distributor. The merger has yet to win shareholders’ approval. (Reporting by Charlie Zhu in HONG KONG and Beijing Bureau; Editing by Raju Gopalakrishnan)

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