China Mobile dismisses vice chairman amid probe; adds to a string of scandals at state firms

China Mobile dismisses vice chairman amid probe

BEIJING — China Mobile Ltd., the world’s biggest phone company by subscribers, said Friday it has dismissed its vice chairman, who a business magazine reported is being investigated for misconduct when he worked for another carrier.

Zhang Chunjiang, a prominent figure in China’s state-owned telecoms industry, was earlier fired as an executive of China Mobile’s parent company and secretary of its Communist Party committee, according to state media.

Zhang was removed effective Thursday as China Mobile’s deputy chairman, the company said in a statement through the Hong Kong stock exchange.

It cited “alleged serious financial irregularities” and gave no details. But China’s most prominent business magazine, Caijing, said he was suspected of hiding losses at another state-owned phone company where he was chairman before he joined China Mobile in 2008.

A top anti-corruption official said Thursday investigators will look closely at executives at state-owned enterprises this year after dozens of managers were implicated in misconduct in 2009, according to state media.

Chronic corruption is fueling public anger that communist leaders have warned could erode the party’s grip on power. Thousands of government and party figures are punished every year for corruption, and some are executed, but authorities have given no indication whether the problem is abating.

“We will push ahead with investigations and try to curb corruption in SOEs,” said the deputy minister of supervision, Qu Wanxiang, according to the newspaper China Daily. He said investigators would look at restructuring, mergers and acquisitions, real estate dealings and construction projects.

Zhang, a former chairman of China Netcom Ltd., is suspected of concealing losses ahead of a 2008 merger with rival China Unicom Ltd. in hopes of becoming boss of the combined entity, Caijing said. It said Netcom reported 2003 losses of 11.1 billion yuan ($1.3 billion at that time), while auditors later found losses of up to 20 billion yuan.

China Mobile says it has 518 million mobile accounts.

Among other cases, the former chairman of Sinopec Ltd., China’s second-biggest oil company, was convicted in July of taking 196 million yuan ($29 million) in bribes and received a suspended death sentence. The following month, the former boss of the company that runs airports in Beijing and other Chinese cities was put to death for taking bribes.

The former general manager of the China National Nuclear Corp., a major power plant builder and operator, has been under investigation for unspecified violations since August, according to the government’s Xinhua News Agency.

Associated Press researcher Bonnie Cao contributed to this report.

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China Mobile Ltd.: www.chinamobileltd.com