Shares in China Railway Group fell more than 7 per cent yesterday after the construction company announced that its president had died in an accident, writes Tom Mitchell.
While the company declined to elaborate on the circumstances surrounding Bai Zhongren’s death at the weekend, state media reported that the 53-year-old executive had been suffering from depression.
The company, which is listed in Hong Kong, said its operations remained normal, and that Mr Bai’s duties would be assumed by its chairman pending the appointment of an acting president.
China Railway Group has led the rollout of the country’s railway network, which was expanded rapidly in recent years as Beijing sought to cushion the impact of the global financial crisis.
Last month, the opening of a new railway line in southeastern China pushed the system’s length to more than 100,000km, including more than 10,000km of high-speed routes.
The company, however, has taken on large debts to fund construction. In October it reported total debt of Rmb532bn ($88bn), compared with assets of Rmb627bn.
According to a long-awaited report released last week by China’s national auditor, debts in the railway sector exceeded Rmb2.9tn and related companies could require central government assistance if they face repayment difficulties.
China’s railway industry has been grappling with a host of safety and corruption investigations since a high-speed rail crash in July 2011 claimed the lives of 40 people and prompted the railways ministry to lower speeds on the network from 350km/h to 300km/h.
Mr Bai had not been implicated in any of the investigations.
The 2011 collision between two trains in Wenzhou, in eastern China, was blamed on a signalling failure during a lightning storm.
Liu Zhijun, railways minister at the time, was subsequently convicted of corruption and received a suspended death sentence last July. The scandal also led to the arrests of a former senior ministry engineer and a businesswoman with close ties to the ministry, which was subsequently split into an operating company and a regulator.
The crackdown on the railway sector preceded a renewed anti-corruption push sparked last year by Xi Jinping, China’s president.
中国中铁(China Railway Group)H股股价昨日下跌逾7%。该公司发布公告称，其总裁白中仁(见右图)上周末因意外死亡。