For years, Xi Jinping, China’s leader, has railed against greed and corruption in the country’s financial sector, exemplifying some prominent figures.
But recently the anti-graft campaign has gained momentum, sweeping up a who’s who from the country’s financial and insurance sectors as Mr Xi and the Chinese Communist Party try to consolidate control of a critical facet of the economy.
China’s anti-corruption officials warned bankers in February that it would “investigate and deal with those who ignore the party’s leadership.” They instructed finance staffers to embrace the party’s values and avoid emulating what they see as the West’s sole focus on money.
In addition to the discipline campaign, China has made sweeping reforms to its financial regulatory system, while party officials are deeply entrenched in state-owned financial institutions.
Mr Xi and his deputies are using the disciplinary cases to enforce party loyalty to the financial system, said Wu Qiang, a current affairs reporter and political analyst in Beijing.
“They can only do it by checking personnel changes and guiding the party’s leadership through it,” said Mr. Wu.
Just how far the government would go to take down prominent businessmen became clear in 2017 when police called Xiao Jianhua, a Chinese-born billionaire known for managing assets for the country’s ruling elite, from his apartment in the Four Seasons Hotel in Hong Kong kidnapped. Kong. He was sentenced to 13 years in prison last year.
The party later intervened to stop Jack Ma, co-founder of e-commerce giant Alibaba, from going ahead with what would have been a blockbuster stock offering from Ant Financial in 2020. Ant, Alibaba’s financial sister company, scrapped its plans and Mr. Ma agreed to relinquish control of Ant this year.
In 2022, Chinese regulators said they penalized banking and insurance institutions 4,620 times, up 19 percent from a year earlier, while issuing 7,561 fines to officials, up 26 percent.
“Disciplining finances is a powerful way to control elites,” said Yuen Yuen Ang, a professor of political economy at Johns Hopkins University.
Dozens of Chinese executives and senior officials in the country’s financial sector have been investigated or sanctioned since the beginning of this year, according to the Communist Party’s Central Commission for Discipline Inspection, the country’s main anti-corruption watchdog, and the National Supervisory Commission, the government’s regulator. who collaborates with the discipline committee.
Here are some of the prominent figures and companies caught in the dragnet this year.
Liu Ti, Shanghai Stock Exchange
Liu Ti, the former deputy general manager of the Shanghai Stock Exchange, is under investigation for suspected breaches of duty. The authorities have not disclosed the reasons for the investigation. The Shanghai Stock Exchange did not respond to requests for comment.
Li Xiaopeng, China Everbright
Li Xiaopeng, the former party secretary and chairman of China Everbright Group, a giant state-owned financial company, is under investigation for alleged violations of discipline and law.
According to Chinese media reports, employees of Everbright Xinglong Trust in Shenzhen were removed by authorities in April, likely in connection with the investigation of Mr. Li. It involves a real estate project in Shenzhen that Everbright has been working on with several developers.
The party committee of the China Everbright Group – leading units within state-owned enterprises that report to the Communist Party – said it “strongly supports” the decision to investigate Mr Li and would “fully cooperate” with anti-graft regulators.
Huang Xianhui, Huarong Wealth Management
Huang Xianhui, the former party secretary and general manager of Huarong Asset Management in Beijing, is under investigation for suspected duty-related violations of the law.
Huarong Asset Management, a so-called bad debt firm founded in 1999, is one of the four major state-owned companies set up in Asia after the financial crisis to take over loans and other assets that had fallen in value.
In January 2021, Lai Xiaomin, the former chairman of Huarong, was sentenced to death on charges of bribery, corruption and bigamy after taking about $277 million in bribes. He was executed several weeks later in a rare practice in China of the death penalty for economic crimes.
Liu Liange, Bank of China
Liu Liange, former party secretary and president of the Bank of China, is under investigation by the country’s top anti-corruption watchdogs.
Mr. Liu was ousted as party secretary of the bank in February and resigned as president and other positions a month later. The Bank of China, a state-owned commercial lender, has been targeted by claims of misappropriation of funds, misclassification of the risks of certain loans and other alleged violations.
On the same day Mr. Liu was ousted as party secretary of the bank, regulators announced that the bank, along with four other financial institutions, had been fined for similar violations.
At least four other senior Bank of China executives have been under investigation since the beginning of the year for alleged violations of discipline and law.
Tian Huiyu, China Merchant Bank
Tian Huiyu, an economist and banker who served as president of China Merchants Bank from 2013 to 2022, whose shares are traded in Shanghai and Hong Kong, has been under investigation since April 2022 on suspicion of insider trading and insider trading.
In February, Chinese prosecutors filed a case against Mr Tian, charging him with bribery, insider trading and insider trading. The prosecution also charged Mr Tian with “abuse of power for personal gain causing particularly heavy losses to national interests”.
Wang Liang, president of China Merchants Bank, said in October 2022 that “Tian Huiyu’s case is just a personal incident and has no direct relationship with CMB.”
Bao Fan, China Renaissance Holdings
China Renaissance Holdings made a stunning announcement on Feb. 16: It had “couldn’t get in touch” with Bao Fan, the company’s chairman and CEO and a prominent technology sector investment banker. The company’s share price plummeted after the revelation.
The disappearance of Mr. Bao sent a chilling message to the industry about the scope of Beijing’s crackdown on the business elite. Chinese media reported that authorities had detained him to assist in an investigation into a former top executive of his company.
The company issued a statement on Feb. 26 that Mr. Bao “cooperated with an investigation” by Chinese authorities. There has been no update from the company on Mr. Bao Fan’s whereabouts since then.
Zhou Gaoxiong, Guangdong Rural Credit Union
Zhou Gaoxiong, the former party secretary and chairman of the Guangdong Rural Credit Union, was expelled from the party in January after being charged with grave breaches of duty and suspected bribery offences. Mr. Zhou, who had retired three years earlier, also had to give up his pension benefits.
The move continued the crackdown on China’s rural banks after a scandal in Henan province last year when rural banks refused to let depositors withdraw their money, sparking waves of protests.
Authorities began investigating Mr Zhou last November for alleged violations of discipline and law.