A joint venture partner of PetroChina saw share trading cease amid high level investigations.
PetroChina stock pressure Image: PetroChina |
Shares in China Oil & Gas Group Ltd were suspended on September 11th, pending a statement related to inside information, according to the Hong Kong Stock Exchange, before trading began again later on in the day.
While the official reason for the pause in trading has not been disclosed, many believe it is related to an unconfirmed report that a former executive at the company was being investigated as part of a government probe.
The group, a joint venture partner with state-owned oil giant PetroChina, stated the executive no longer worked at the company and that the reports were “inconsistent with the facts.”
The government announced that Jiang Jiemin, former chairman of PetroChina and its parent company China Nationa Petroleum Corp, was officially under investigation for “serious discipline violations.”
Energy investigations, including ones into Kunlun Energy and other PetroChina executives, have already frightened the Hong Kong stock markets. China Oil and Gas has lost around 25% of its market value in the past month alone. Companies with ties to China’s top oil giant also saw major share sell-offs which put downward pressure on stock prices.
Wison Engineering Services Co Ltd, a major supplier to PetroChina, has also seen its stock suspended and bank accounts frozen. Between 2009 and 2011, the Hong Kong-listed firm booked 8.1bn yuan ($1.32bn) in revenue from PetroChina, although insists the state-sponsored contracts were won because of its technical capabilities.