Sany shares plummet from bribery rumor
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People pass by a bill of Sany. Sany's shares tumbled yesterday over a bribery rumor. [CFP] |
Shares of Shanghai-listed Sany Heavy Industry Co Ltd dropped 4.3 percent on Wednesday after an anonymous source claimed the Changsha, Hunan province-based company used bribery to win orders and maintain its clients.
The authenticity of the claim is yet to be investigated by authorities.
At the time of writing, Sany had not issued an official statement on this matter.
Analysts said they do not expect the scandal to undermine the company's leading position in the domestic machinery market or to affect its overseas expansion plans.
As part of the campaign to raise its profile globally, Sany, the nation's largest private sector construction equipment maker, donated a concrete pump truck worth 6 million yuan ($920,000) to Tokyo Electric Power Co in March, to help cool down Japan's nuclear reactors at the Fukushima Daiichi nuclear power plant.
During the Chilean copper mine collapse in August 2010, Sany had offered support to rescue workers.
However, an online article posted Tuesday on Tianya.cn, China's most outspoken bulletin board system, made accusations against Sany.
A netizen who claimed to be a former employee of Sany, uploaded 19 pages of document as evidence that the company and its Xinjiang branch were involved in giving bribes of more than 5 million yuan.
Mocking Sany's corporate tagline - quality changes the world - the netizen posted online under the nickname of "bribery changes the world".
One of the documents that appeared to be an electronic form displayed a signature with a Liang-surname, allegedly belonging to the son of Sany's chairman Liang Wen'gen.
Xiang Wenbo, president of Sany Heavy Industry, responded to this claim on Wednesday morning in his micro blog, saying that the uploaded documents are forged because there is no official signature or the company seal, according to a 163.com report.
However, postings by Xiang and the netizen were soon made unavailable or disappeared from various websites.
Xiang said on his micro blog that he will not make any comments on the issue before any official clarification.
Sany has refused to comment on the issue.
Wang Dongdong, an analyst with Orient Securities, told China Daily that this incident will certainly cause a shock wave in Sany, and the company has to cope with questioning from its shareholders, and scrutiny from the general public.
Regardless of the outcome of the issue, he said he doesn't expect Sany's corporate performance as well as its overseas development to be affected in the long term.
"However, it is hard to gauge the impact of the incident without knowing the authenticity of the claim," said Wang.
Wei Jing, an analyst with Guodu Securities, said Sany will try its best to contain the negative effects.
"Sany is planning to float its shares in Hong Kong in mid 2011. This will be an important step for Sany to go overseas," Wei said.
A report from Chinanews.com said the company had reported the case to the police. Sany is expected to release a formal notice after the investigation.
Zhan Pengpeng, partner of Shanghai-based Haihua Yongtai Law Firm, told China Daily that if the bribery case is proved true, the employees involved would be sentenced to up to five years in jail and the company fined multiple millions of yuan for improper competition," said Zhan.
Shares of Sany opened low in the Shanghai Stock Exchange on Wednesday and fell to the daily limit of 10 percent within minutes, before closing at 26.27 yuan, shedding 4.3 percent.
