China Resources Holdings denies fraud

China Resources Holdings on Wednesday rebutted the claim that corruption and fraud was involved in a 10-billion acquisition in 2010 by one of its subsidiaries, after a reporter with the Xinhua News Agency leveled accusations at its chairman online.

The many speculations, assumptions and even vicious defamation in recent coverage and the so-called whistle-blowing have caused an undesirable impact on the reputation of the company and the leaders, said a statement on the company's website.

"China Resources operates normally by strictly adhering to laws and regulations. All its business activities are in the interests of shareholders and the public interest. If media and the public find malpractice in the acquisition, they are welcome to provide evidence to the company and its supervisor," read the statement.

The company also reserves the right to call to account anyone who libeled or defamed it and ask for economic losses, said the statement.

China Resources is a State-owned enterprise, and a Fortune Global 500 conglomerate involved with the retail, property, finance and power sectors.

Addressing his accusations to the Party's discipline inspection authorities, Wang Wenzhi, a chief reporter for the Economic Information, a newspaper affiliated with Xinhua, alleged on his Sina Weibo that Song Lin, chairman of China Resources, and other senior management staff, intentionally overpaid Shanxi Jinye Coal & Coking Group for a 2010 acquisition, causing billions of yuan of losses in State-owned assets. The post was later removed.

"They are derelict in their duty and are suspected of corruption," said Wang, whose findings were published in Economic Information on July 5.

China Resources Power Holdings Company (CR Power), one of the subsidiaries, was valued at 7.9 billion yuan ($1.3 billion) for an 80 percent stake in coal-mine assets of Jinye Group, which consists of 10 entities. Considering all accounts, the overall price for the asset amounts to 10.3 billion yuan, said the report.

However, the asset was valued at 5.2 billion yuan, half of CR Power's bid, by Datong Coal Mine Group, but the acquisition was soon halted. Part of the asset appraisal was done by an organization entrusted by Jinye Group, which should have been done by the CR Power, and the main assets were in deficit after the acquisition.

A 2010 audit by the National Audit Office indicated CR Power illegally paid Jinye group over 5 billion yuan in advance.

"I have considered before reporting that I might be persecuted, but I am not afraid. I want to do righteous things,"the official website of the Beijing News quoted Wang as saying.

"By real-name reporting, I can attract more attention, let the facts become more widely known and get the authorities involved," said Wang.

Calls to Wang went unanswered on Wednesday afternoon.