DOZENS DETAINED AMID GRAFT PURGE
More than 30 executives from state banks and insurers netted in first five months of year, tally shows
More than 30 state regulators, bankers and senior financial executives have been detained so far this year, a tally by the Post shows, as the top corruption watchdog continues a sweeping crackdown in response to President Xi Jinping’s call to make China a “financial superpower”.
Analysts expect more heads to roll as Beijing is determined to stamp out any risks linked to financial corruption and maintain stability. They said graftbusters were going after officials accused of colluding with bankers and executives to approve loans in exchange for kickbacks and other favours.
The latest to fall was Lou Wenlong, 66, a former vice-president of state-owned Agricultural Bank of China.
The Central Commission for Discipline Inspection (CCDI), the top anti-corruption agency, has posted on its website that Lou was under investigation for “serious violations of party discipline and the law” – a familiar euphemism for corruption. Lou was in charge of handling bad debts at the bank until he retired in 2017.
According to the Post’s tally, 17 of those netted in the past five months were senior managers of state-held banks or their regional branches. Among these, four were retired officials of China Development Bank: former vice-president Li Jiping, former Shandong and Jilin provincial branch bosses Yu Zeshui and Zhang Chi, and former Qinghai branch vice-president Wang Zhun.
As one of the country’s three policy lenders, CDB is tasked with financing large-scale government development projects. It has become embroiled in several corruption scandals in recent decades. In one of the most high-profile cases, former chairman Hu Huaibang was sentenced to life in prison in 2021 for taking 85.5 million yuan (HK$92.3 million) in bribes.
In the latest crackdown, 11 senior managers of the stateowned Industrial and Commercial Bank of China, China Construction Bank, and Bank of China have been placed under investigation. Along with Agricultural Bank, these lenders make up the “Big Four” central to China’s banking sector.
State insurers are also under scrutiny. Liu Anlin, former president of China Life Insurance Group; Sun Jian, former deputy general manager of the Guangxi provincial branch of the People’s Insurance Company of China; and Du Jintao, former general manager of the Shenzhen branch of China Taiping Life Insurance, are also under investigation.
Xie Maosong, a senior researcher at Tsinghua University’s National Institute of Strategic Studies, said those with the power to approve large sums of commercial loans were always prominent targets for bribery as “the returns on such bribes might be [up to] a hundred times more”.
“We can see from past CCDI cases that businesses, especially property developers, would bribe bankers for loans to finance their projects,” Xie said.
“When the projects go sour, the loans become bad debts to be absorbed by the banks.
“But the bank loans are actually the people’s hard-earned savings, so the losses because of financial corruption are actually like stealing from the public.”
Cases involving regulators have accounted for only about 10 per cent of CCDI investigations in the finance sector, but their impact can be far-reaching. Analysts said some of these regulators were well-known public figures and their downfall had jolted the sector.
One example is the fall of Ren Chunsheng, who led the preparatory work to set up the Complaint Mediation Centre of the new National Financial Regulatory Administration (NFRA).
A CCDI notice on May 7 said Ren had been detained for “serious violations of party discipline and the law”.
Ren, 55, became a leading figure in the insurance industry after serving for decades at the former China Banking and Insurance Regulatory Commission, replaced by the NFRA last May. He was appointed chairman of China Insurance Investment Co Ltd in 2019 and later chaired the Shanghai Insurance Exchange.
Just two weeks before Ren’s detention, the CCDI announced that Yao Qian, director of the technology supervision department at the China Securities Regulatory Commission, had also been detained for a corruption investigation.
Yao’s fall was a bombshell for China’s digital and cryptocurrency world, because he was once hailed as the “crypto man” at the country’s central bank. The nickname was due to his stint as the first director of the People’s Bank of China digital currency research institute, which studied the development of digital yuan, although China bans cryptocurrency outside the state sector.