Tencent Employee Faces Corruption Investigation in China
(Bloomberg) -- Tencent Holdings Ltd. said an employee is under investigation for alleged corruption in his personal dealings, rejecting a report that the probe involved the unauthorized transfer of WeChat data.
The probe of Zhang Feng does not involve Tencent’s WeChat messaging service, a spokesperson said. The Wall Street Journal had reported earlier that Zhang had been detained for allegedly sharing personal data collected by WeChat with Sun Lijun, a former vice public security minister that’s being investigated by Beijing.
Zhang, who had been identified as a vice president in a November 2018 statement by a local municipal government, has never held a senior position and is not a vice president, the Tencent spokesperson said. Investigators are looking into what type of data Zhang may have shared with Sun and what the government official may have done with the information, the WSJ said.
Tencent said earlier this month it fired more than 100 employees on suspicion of graft over a series of probes over the past year and reported more than 40 workers to police. The company’s rare revelation underscores Beijing’s increasingly tough stance on corruption among government cadres and corporate executives.
China is also tightening scrutiny over its most powerful tech corporations including Tencent and arch-rival Alibaba Group Holding Ltd., seeking to rein in their growing power in a plethora of sectors from finance to e-commerce and the sharing economy.
Pony Ma, the company’s chairman and co-founder, isn’t under probe, according to a person with knowledge of the matter. He has been free to leave China and traveled to Singapore last year, the person said, asking not to be identified discussing a private matter.
Shares of Tencent, Asia’s most valuable company, fell as much as 1.6% before paring losses in Hong Kong trading.
“It definitely will trigger some profit taking for the stock given it has surged significantly this year,” said Daniel So, a strategist at CMB International Securities Ltd. “Although the case involves corruption which is a sensitive topic, it seems that the impact will not be as deep as Alibaba at this moment as it is linked to an individual rather than the internet business. Investors will still embrace the stock.”
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