China's CEFC says operations normal, denies reports of chairman probe

FILE PHOTO: A CEFC logo is seen at CEFC China Energy's Shanghai headquarter in Shanghai, China September 12, 2016. REUTERS/ Aizhu Chen/File Photo

SHANGHAI/BEIJING (Reuters) - CEFC China Energy said it was “operating normally” after the private energy firm was buffeted by reports that its chairman was being investigated for suspected economic crimes.

The statement came as shares in a subsidiary extended losses and its bonds were suspended from trade.

CEFC, which has agreed to buy a nearly $9.1 billion stake in Russian oil major Rosneft, said in a statement on its website late on Thursday that media reports about its chairman, Ye Jianming, “had no basis in fact”. It did not give further details.

Reuters reported on Thursday, citing a person with direct knowledge of the matter, that Ye had been taken in for questioning earlier this year. Chinese magazine Caixin had reported the news earlier in the day.

Trade in bonds issued by CEFC Shanghai International Group worth some 14 billion yuan (1.6 billion pounds) has been suspended indefinitely following a fierce sell-off sparked by reports of the investigation.

Shares in CEFC Anhui International Holding were down 3 percent on Friday morning, after plunging as much as 10 percent on Thursday, the maximum allowed.

The news comes after the Chinese government last week took control of major insurer Anbang Insurance Group Co Ltd and said its chairman was being prosecuted for economic crimes.

Beijing has been growing increasingly bold in a bid to curtail big-spending conglomerates as it cracks down on financial risk.

It also comes ahead of an annual meeting of parliament, which opens on Monday, when President Xi Jinping is likely to cement his hold on power with a proposal to remove term limits for the office.

Reporting by Adam Jourdan and Aizhu Chen; Additional reporting by Andrew Galbraith; Writing by Josephine Mason; Editing by Stephen Coates and Edwina Gibbs