OREANDA-NEWS. December 17, 2014. Shares of Sinopec Yizheng Chemical Fibre, which has just received approval from mainland securities regulators to buy its ultimate parent’s oilfield services assets for 24 billion yuan (HKD30 billion), dropped 12.2 per cent, after it confirmed the chief of Sinopec Oilfield Service is under investigation and has left the company.

In a filing to the Hong Kong stock exchange, Yizheng yesterday said Xue Wandong, a general manager and director of Sinopec Oilfield Service, was under investigation and had tendered his resignation letter to the board, without giving a date.

“As a result, the board will not nominate him as a candidate for vice-chairman and general manager of [Yizheng] for shareholders’ approval at [the] next shareholders meeting,” it said.

Xue was a candidate for the positions after the completion of the sale of China Petrochemical Corp’s oilfield services assets to Yizheng.

Yizheng said its board did not expect its business after the asset injection would be affected by Xue’s resignation and investigation, without offering an explanation of the nature of the investigation.

The company said it had received approval on Thursday from the China Securities Regulatory Commission for the asset injection.

While the announcement would help dispel concerns the deal may be affected by Xue’s investigation, an analyst covering the oil and gas sector said it would not eliminate investors’ worries over a wider probe.

“Given rival PetroChina has seen the removal of a string of senior officials who have been taken away to assist graft investigations, it is natural for investors to worry that Xue may not be the only Sinopec official affected by President Xi Jinping’s anti-corruption drive,” he said.

Influential financial portal Caixin cited unnamed sources as saying Xue was taken away by the authorities on Wednesday morning during a company meeting, making him the first senior official at Sinopec to be put under investigation since a 12-member investigation team from the central government was sent to Sinopec.

Yizheng’s shares yesterday fell 39 HK cents to close at HKD 2.80, the lowest closing price since September 12, a trading day before it unveiled the asset injection that sent its shares 80 per cent higher to HKD 3.10.