Shares in China Telecom dropped as much as three percent Monday after news its head was under investigation, the latest high-profile target in a corruption crackdown.
The firm, one of China's big-three telcos, saw its shares trade as low as HK$3.62 ($0.47) on Hong Kong's bourse, compared to the previous closing of HK$3.73.
The probe into Chang Xiaobing for “severe disciplinary violations” was announced by the Central Commission for Discipline Inspection, the watchdog of the ruling Communist Party.
The term is normally a euphemism for graft.
Chang had been "taken away", according to an article in the respected business magazine Caijing, adding that he disappeared just days before a meeting of the state-owned company planned for December 28.
Chang's phone was switched off and he had not responded to multiple calls, it added.
"Since last year, when the authorities were probing oil companies, we knew they would be doing this for other sectors. Now it's telecoms," financial analyst Jackson Wong from the brokerage firm Simsen Financial group told AFP.
The drop had narrowed to 1.07 percent by the lunch break, with shares trading at HK$3.69.
Wong said investors are moving cautiously pending further details of the probe.
Chang Xiaobing has disappeared days before a China Telecom meeting planned for December 28.
Authorities have been pursuing a hard-hitting campaign against allegedly crooked officials since President Xi Jinping took office in 2013, a crusade that some experts have called a political purge.
After a stock market rout this summer, the nation's financial sector was under the spotlight with several high-level executives reportedly being hauled in.
Billionaire Guo Guangchang, dubbed China's Warren Buffett, disappeared from public view earlier this month amid reports he had been detained by police in Shanghai.
He briefly resurfaced afterwards but his conglomerate flagship, Fosun, confirmed the 48-year-old was "assisting in certain investigations" by Chinese authorities.
This is not the first wave of investigations to hit the telecoms industry.
The country also probed the top three operators in 2010 and 2011, forcing mid-level executives and above to surrender their passports.