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Chinese oil tycoon detained for alleged financial crimes

Chinese oil tycoon detained for alleged financial crimes

The chairman of a Chinese private oil company association has been detained for suspected economic crimes, a company controlled by the tycoon said Tuesday.
Gong Jialong, chairman of the Great United Petroleum Holding Co., was detained by police amid an investigation into unspecified economic crimes, Tianfa Petroleum Co. said in an announcement posted on the Web site of the Shenzhen Stock Exchange.
The notice said authorities had taken "coercive measures" against Gong, who is Tianfa's biggest shareholder.
Tianfa, one of China's biggest private oil corporations, said the company's operations were not affected by Gong's situation.
Gong set up the China Chamber of Commerce for the Petroleum Industry in 2004 to lobby on behalf of private oil companies both in China, where state-owned giants dominate, and overseas.
Tianfa, based in central China's Hubei province, has shares traded in Shenzhen but faces a possible delisting due to poor economic performance, the state-run newspaper Shanghai Daily reported Tuesday.
It said that Gong was detained Thursday for alleged illegal fundraising involving luring investments from members of the Chamber of Commerce for the Petroleum Industry into the high-risk oil exploration business.
It was unclear if Gong's detention would affect the prospects of the industry group.
"We only got the news from the Internet, so we don't have any comment," said Wang Yong, secretary general of the group, when contacted by phone.
Phone calls to Great United Petroleum rang unanswered Tuesday.
Loss-making Tianfa owed at least 2.9 billion yuan (US$370 million; euro280 million) in bank loans as of May, the report said.
Gong apparently had big ambitions, saying he planned to seek strategic foreign investment to help his company achieve a plan of expanding into a multinational petroleum giant, state media reports said.
The situation surrounding private oil companies reflects the myriad complexities of doing business in a country where most strategic resources are controlled by the state. China's private oil companies reportedly own billions of dollars worth of local oil assets but face significant barriers in obtaining financing and other support. Many operate on the margins of the industry.
By creating an industry group, members hoped to pool capital and share risks, but they faced a challenge in acquiring government licenses for various sectors, including sales, imports and exploration, reports said.


Updated : 2020-12-05 03:05 GMT+08:00