BEIJING (TheStreet) -- Shares in Chinese luxury-goods suppliers fell Tuesday as the Communist Party's campaign against lavish government spending turned against a businessman who made a fortune selling marble and chandeliers for public buildings.
Zhu Xingliang's arrest on bribery charges was announced by his company, Golden Mantis Building Decoration, which for years has been riding a wave of costly building construction projects financed by government agencies eager to flaunt their wealth. It was unclear whether Zhu would continue serving as the company's president.
Leaders in Beijing have been telling the nation's bureaucrats to curb frivolous spending or incur the party's wrath since President Xi Jinping took office in late 2012.
On the Shenzhen Stock Exchange, Golden Mantis shares fell 3.3% Tuesday to close at 19.13 yuan, a competing supplier Guanfu Modern Household Wares lost 1% to end the day at 4.74 yuan and platinum jewelry maker Ming Jewelry declined 3% to close at 23.66 yuan. On the Shanghai exchange, shares in bone china and jade porcelain maker Glarun Technology declined 4.4% to end at 41.53 yuan a share.Golden Mantis outfits building interiors with crystal light fixtures, rare wood paneling and other upscale accoutrements. In addition to government offices, company customers have included Intercontinental Hotels (IHG), Marriott (MAR), Hilton (HLT), Sheraton, Westin and Hyatt hotels across China. The company's major public contracts included interior decorations for the Bird's Nest Stadium built for the 2008 Beijing Olympics and the Hongqiao airport-railway center in Shanghai. State media called Zhu, 54, the richest man in Jiangsu Province and said he's being investigated for allegedly bribing Nanjing's mayor. In October, the Communist Party's mouthpiece, People's Daily, reported officials had launched a bribery probe targeting the then-mayor, Ji Jianye. He then became one of more than 10 high-level officials deposed last year by the party for alleged corruption. Gold Mantis has reported strong growth every quarter since 2011, the year its profit more than doubled. Last year, the company recorded a 31% net profit increase to 1.5 billion yuan on sales of 18.3 billion yuan. At the time of publication the author had no position in the companies mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
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