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Tuesday
Mar112014

Wison Engineering says chairman arrested on bribery charges

Hua Bangsong, Courtesy of NTDTV.com, via YouTubeShanghai-based Wison Engineering Services Co. said Friday that its chairman was arrested by Chinese police for "alleged bribery activity."

After the Chinese oil-engineering provider was informed of Chairman Hua Bangsong's arrest through his family, the company issued a statement to the Hong Kong Stock Exchange. (Wison's statement can be found here.)

Wison said in its filing that its board had not been informed of any details regarding the allegations.

In September, Wison announced that Chinese authorities had seized the company's records and frozen some of its bank accounts as part of an investigation of several companies. 

Chinese authorities have targeted the oil industry as part of an anti-graft campaign by President Xi Jinping. Several oil-industry executives have been detained and investigated, including Hua and the one-time chief of China Petroleum Corp., Jiang Jiemin.

Wison's statement to the stock exchange denied rumors in Chinese media that Hua had been holding shares in the company on behalf of a son of a former Chinese official. The former official and member of the Politburo Standing Committee, Zhou Yongkang, retired in 2012.

"Mr. Hua Bangsong does not hold any shares as nominee or on behalf of any other person," the statement said.

Hua holds about 78 percent of Wison's issued shares.

Wison said accusations that it benefited from "unlawful advantages" relating to an engineering contract with state-controlled PetroChina were "unsubstantiated and unfounded."

Trading in Wilson's shares have been suspended in Hong Kong since September.

Wison said in its annual report in December that it expects a significant loss for 2013.

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Julie DiMauro is the executive editor of FCPA Blog and can be reached here.