SOE chairman responds to whistle-blower fraud claims

The Hong Kong-based State-owned enterprise (SOE) at the center of a real-name Sina Weibo tip-off accusing them of fraud said late Wednesday that the accusation against its chairman was "pure slander."

In a statement by China Resources (Holdings), Song Lin, the chairman, said the acquisition of a Shanxi-based coal company in 2010, which was alleged to be fraudulent by the whistle-blower, abides by the Chinese mainland's law and Hong Kong's regulations for listed companies.

The whistle-blower, Wang Wenzhi, a reporter with the Economic Information Daily newspaper under the Xinhua News Agency, made the accusation on his Weibo on July 17. He said that Song and other senior executives intentionally overpaid for the purchase and caused billions of yuan of losses in State-owned assets.

The acquisition was nothing but a legal business activity, read the statement, adding that some Hong Kong-based news outlets ran absurd reports and related the case to some senior State leaders.

Song also said he would reserve the right to take further legal action.

The company sent all of its employees an e-mail on July 24 saying that the whole tip-off, orchestrated behind the scenes and aimed at tarnishing the company's image, caused huge economic losses and had serious political influences.

The letter also called on all employees to be confident and not to be disturbed by "rumors."

Wang said then the letter shows that Song started to divert the public attention away from the allegations.