Wison clarifies link with PetroChina

Trading in the shares of Wison Engineering Services Co, a PetroChina supplier, was still suspended Tuesday, even though the company has clarified its relationship with PetroChina.

Wison, an engineering and construction service provider to the oil industry, said in a statement on Monday that the company "operates legally and has completed the necessary compliance check required by the Hong Kong Stock Exchange."

It also said that Hua Bangsong, the controlling shareholder of the company with 78.13 percent stakes, is now assisting relevant Chinese authorities in their investigations.

Wison suspended trading on Monday after its stock price slumped by 16.46 percent to HK$1.98 ($0.26). on reports about its business relationship with scandal-hit PetroChina.

Jiang Jiemin, head of the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council and the former chairman of PetroChina, as well as four senior executives of the oil giant have been investigated by Chinese authorities for corruption.

Jiang was removed from office as the SASAC head on Tuesday.

Wilson's share price dropped 11.4 percent on August 27, when three more senior PetroChina officials were investigated for violations of discipline after Wang Yongchun, deputy general manager of PetroChina, was investigated by authorities.

Wison tries to distance itself from PetroChina, as it said in the statement that its revenue gained from contracts with PetroChina in the first half this year was quite small and insignificant, noting that the company is operating as normal.

However, as reported by Hong Kong-based Ming Pao Daily, Wison's revenue earned from PetroChina and its subsidiaries accounted for 63 percent in 2009, 80 percent in 2010 and 58.4 percent in 2011 of the company's total revenue.

After the company got listed in 2012, coal chemical business began to account for a much bigger proportion in the company's revenue, according to the report.

Wison won a large number of orders from PetroChina since early 2000s and some senior executives of Wison used to work in PetroChina or its subsidiaries, media said.

An executive surnamed Sun used to work in PetroChina's Daqing branch and joined Wison in 2004. In the same year, Wison was awarded contracts for two ethylene cracking furnace projects from Daqing branch, China Business News reported on Thursday.

In mid-August, media reports said Wison's Hua hold shares for others, triggering 8 percent slump in its stock price on August 13. The company later announced that Hua is the only controlling shareholder of Wison and he does not hold shares for others.

Separately, China Oil and Gas Group Ltd, which is believed to have had close cooperation with PetroChina, saw its share prices slump last week.

Data from the Hong Kong bourse showed that funds have reduced their H-share holdings of PetroChina. And Forbes reported Sunday that the corruption could lead to probes by the US Securities and Exchange Commission and the Department of Justice into the New York-listed PetroChina.