China’s Telecoms Corruption Probe Widens As Beijing Shuffles Top Jobs

Hats are being shuffled in China’s fast-growing but corruption-tainted mobile telecoms industry. Xi Guohua is reportedly moving from the Ministry of Industry and Information Technology (MIIT), where he was a vice-minister, to take up the chairmanship of China Mobile. The country’s largest mobile phone operator has lost seven senior executives to corruption charges in the past couple of years and is currently the focus of an industry-wide corruption investigation being conducted by the Party’s discipline enforcers.

Xi will replace Wang Jianzhou, the 62-year old who had given up his chief executive role at China Mobile last August in what was presented as a corporate governance reorganization. A vice chairman of China Telecom, the no 3 in the industry, is moving to the ministry to be vice minister, while the company’s general manager Wang Xiaochu, is to become governor of Yunnan. No 2 China Unicom’s general manager, Chang Xiaobing, will replace him at China Telecom, with Lu Yimin, China Unicom’s president moving up to chairman.

The corruption probe into the telecoms industry is still unfolding, though the inquiries seem to revolve around embezzlement and bribe-taking. State media say the sums involved could exceed 350 million yuan. More than 60 senior and mid-level executives at the big three state controlled operators and government officials have been implicated so far.  All three of the largest telecoms companies are under investigation as are some of their data service providers, which is the fastest growing part of the business. Though the  network operators’ large size and state control protects them against the impact of corruption scandals to a certain extent, the probe is clearly expanding and it is uncertain where it will end.

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