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Senior COSCO executive under investigation

Updated: 2013-11-08 16:32
( Xinhua)

BEIJING - China COSCO Holdings Co. Ltd, a Shanghai-listed company and the country's largest shipper, made public late on Thursday that one of its senior executives was "under investigation".

In a statement filed with the Shanghai Stock Exchange, COSCO said its executive director Xu Minjie was under investigation. The statement did not specify his offences.

Xu is also the deputy general manager of state-owned China Ocean Shipping (Group) Company, who controls COSCO.

COSCO has been criticized by investors and investigated by the government following heavy losses in the last two years.

The company has posted the biggest losses among China's listed companies for two consecutive years. It lost 9.56 billion yuan ($1.57 billion) in 2012 after a deficit of 10.45 billion yuan in 2011.

COSCO blamed the disappointing results on the downward trend in the global shipping sector and rising fuel costs. However, analysts believe there are serious problems in its operation, management and risk control. The company's long-term deficiency is also a result of heavy investment in building freight capacity around 2008. It bet wrong on the market and pursued fast expansion, resulting in huge liabilities.

The company was also accused of wasting money on recreational facilities. A government audit report in 2011 showed that the COSCO Group irregularly used welfare funds to build a golf course, incurring operating losses.

The stock price of COSCO opened lower on Friday and was down 3.53 percent at midday to 3.01 yuan per share.

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