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China auto giant FAW gets new chief amid graft scandal
[SHANGHAI] China's third largest carmaker FAW on Thursday named a new chairman, after its previous chief was formally put under investigation for corruption.
China FAW Group said Xu Ping will take over as chairman and company Communist Party chief, according to a statement, poaching him from China's second-largest automaker Dongfeng Motor Corp.
Dongfeng said Wednesday that Xu had stepped down, to be replaced by the chairman of FAW from 1999 to 2007, Zhu Yanfeng.
The Chinese government controls the management of major state-owned enterprises, with power to shuffle their heads at will.
FAW's last chairman Xu Jianyi was put under investigation by the party's graft watchdog in March for "severe" violations of discipline and the law, a phrase that typically refers to corruption.
FAW, originally known as First Automotive Works, is China's third biggest automaker with sales of more than three million vehicles last year, according to an industry group.
Headquartered in the northeastern city of Changchun, FAW and Germany's Volkswagen have a passenger car joint venture that produces the Audi brand, among others.
Dongfeng's listed arm on Tuesday denied that a merger was planned between its parent and FAW.
Dongfeng has several joint ventures with foreign manufacturers and is a shareholder in France's PSA Peugeot Citroen.
Speculation about mergers among China's major state-owned enterprises has grown after state media said the government was considering merging scores of its biggest state firms to create around 40 national champions from the existing 112, but the government denied those reports.
The leadership shuffle between the two automakers follows the Chinese government this week naming new heads of its three biggest energy companies: China National Petroleum Corp, Sinopec and CNOOC.
Dongfeng Motor Group Co. stock was down 0.94 per cent in Hong Kong on Thursday afternoon.