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FAW official investigation may hinder company restructuring plans

Carmen Lee From Gasgoo.com| March 17 , 2015 22:40 BJT

Gasgoo.com (Shanghai March 17) - Earlier this week, the Central Commission for Discipline Inspection released an announcement that FAW Group CEO and Party Secretary Xu Jianyi is being investigated of potential corruption and malfeasance. Having suffered from the investigation, FAW Car has seen its stock price fall severely fall, while sister company FAW Xiali has reported zero growth in its stock price. As FAW Car and FAW Xiali have been engaging in intense internal competition which has been detrimental to the Group’s overall growth, FAW Group has announced its plans to restructure both companies by June 2016 to help boost their performance.

An analyst from a securities industry analyst explained the significance of the case in greater detail: “As one of China’s largest automobile manufacturers, an investigation of FAW Group’s high level management has the potential to severely hamper its restructuring program. It may take the enterprise more time for the program to be properly implemented.”

FAW Group possesses of a number of subsidiary companies, such as FAW Car, FAW Xiali, FAWAY Automobile Components and Qiming Information Technology.

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