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The ‘common prosperity’ goal of China’s communist party has led to an anti-corruption campaign on China banks, with authorities warning top executives of a crackdown. The regulatory scrutiny comes on the heels of an infamous investment banker going missing and the investigation into former Bank of China Ltd Chairman Liu Liange.
Earlier in March, China announced that a new financial regulator would take over the China Banking and Insurance Regulatory Commission (CBIRC) and bring various facets of the financial services industry under the oversight of a single entity.
China banks under fire?
Beijing is pushing to boost profits and remove redundancies by way of an anti-corruption drive across some of the state-owned companies such as China Investment Corp, PetroChina, China Development Bank and others.
The Central Commission for Discipline Inspection (CCDI) earlier said it would ‘look back’ at five financial companies which were targeted in previous anti-graft checks that began in 2021. Dozens officials have come under the scanner since the start of this anti-graft campaign.
At least eight senior executives from large state-owned banks were put under investigation in March alone. The list includes Liu Liange, former chairman of Bank of China (BOC); Wang Jianhong, former head of BOC’s Beijing branch; Zhao Zhiran, an executive of China Construction Bank’s Shenzhen branch, South China’s Guangdong Province, among others.
The most significant name, however, is Liu Liange, who is one of the highest-ranking financial executives in the country. This comes after Wang Bing, former chairman of China Life Insurance Co, was prosecuted in a case of bribery and offshore deposits.
Since 2021, Chinese President Xi Jinping’s anti-corruption probe has seen several investment bankers being implicated, including Everbright Securities and Guotai Junan Securities Co.
Late last week, the CBIRC and the CCDI called in top executives from at least six state-owned banks to address the probe of Liu Liange. They said that the anti-corruption crackdown on China banks would intensify, and that banking staff must comply with laws and regulations.
Meanwhile, Bao Fan, founder, and chairman of China Renaissance Holdings has been missing for two months after which the company said he was “co-operating in an investigation being carried out by certain authorities in the People’s Republic of China”. The sudden disappearance is somewhat unsurprising as billionaires in China have gone off the grid in recent years after Beijing upped its ante through regulatory checks, an example being the disappearance of Alibaba’s Jack Ma.
Back in 2021, China executed top banker Lai Xiaomin, the former chairman of China Huarong Asset Management, after he was convicted of taking bribes worth $260m.
Some other big names in the China banks industry that have fallen from grace include, Wang Bin, the former chairman of China Life Insurance who has been prosecuted, Fan Yifei, the Deputy Governor of People’s Bank of China is under probe, Cai Esheng, former vice chairman of CBIRC has been prosecuted, and Hu Huaibang, former chairman of China Development Bank has received life imprisonment.
