In China, Investigation Of 8 Banking Executives Exposes Widespread Corruption
[et_pb_section admin_label=”Section” fullwidth=”on” specialty=”off” background_image=”https://www.newsoncompliance.com/wp-content/uploads/2017/12/CHINA-ECONOMY-CURRENCY_1475251567435733.jpg” transparent_background=”off” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” module_class=”blog-header”][et_pb_fullwidth_post_title admin_label=”Fullwidth Post Title” title=”on” meta=”off” author=”on” date=”on” categories=”on” comments=”on” featured_image=”off” featured_placement=”below” parallax_effect=”on” parallax_method=”on” text_orientation=”center” text_color=”light” text_background=”off” text_bg_color=”rgba(255,255,255,0.9)” module_bg_color=”rgba(255,255,255,0)” use_border_color=”off” border_color=”#ffffff” border_style=”solid” custom_padding=”100px||80px|” title_line_height=”1.6em”] [/et_pb_fullwidth_post_title][/et_pb_section][et_pb_section admin_label=”section” transparent_background=”off” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” custom_padding=”20px||20px|” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” module_class=”blog-content-wrapper”][et_pb_row admin_label=”Row”][et_pb_column type=”2_3″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” module_class=”blog-text”]
ina recently opened its financial system to more foreign ownership, allowing foreign investors to take controlling interests in Chinese securities firms and insurance companies, among others. Despite the relaxation of ownership rules, the investment environment might not be favorable, given the recent spate of investigations that have led to Chinese banking executives getting sacked.
Cai Guohua, chairman of Hengfeng Bank, one of 12 joint stock commercial banks in China, is currently under investigation for serious violations of Party discipline—an oft-used euphemism for corruption—reported Chinese business news publication Caixin on Nov. 28.
Cai was also stripped of his other position, as the bank’s Party secretary, according to state mouthpiece Xinhua. In the interim, he will be replaced by Wang Hua, the former secretary general of Shandong Province.
The news follows a string of scandals last year surrounding top executives at the bank. First, an embezzlement scandal revealed that Luan Yongtai, then head of Hengfeng, had siphoned off 21 million yuan (about $3.18 million). Luan then outed Cai for taking 38 million yuan (about $5.74 million) via the company’s bonus system, giving himself a higher salary and bonus without approval from either the board of directors or shareholders, according to Chinese news portal Sina.
Then, Chinese business publication Caixin exposed that Cai, who was formerly the vice mayor of Yantai, a city in Shandong Province, had illegally moved 43 billion yuan (about $6.5 billion) of the bank’s trust funds to shell companies, in an attempt to wrestle control of the bank away from Yantai’s State-owned Assets Supervision and Administration Commission, which was the largest shareholder of Hengfeng at the time.
Though Luan was stripped of his position in December 2016, Cai seemed to have dodged legal punishment until now.
The offices of the Hengfeng bank, also known as Evergrowing Bank, in Shanghai in this file photo. (Takatoshi Kurikawa/Shutterstock)
The corruption at Hengfeng Bank was hardly an isolated incident. In February, Yang Dongping, Party committee member and chief risk officer of the Bank of Communications, one of China’s largest banks, was disciplined with “shuangkai,” being stripped of his Party membership and public office position (as chief risk officer).
The Chinese Communist Party’s (CCP) anti-corruption watchdog agency, the Central Commission of Discipline and Inspection (CCDI), found that Yang had illegally provided loans for private business owners and pocketed money for himself and his relatives, according to People’s Net, the online version of the regime mouthpiece People’s Daily.
At Bank of Inner Mongolia—a state-owned commercial bank with total assets of 118.6 billion yuan (about $17.9 billion)—former deputy head Yan Cheng was expelled from the Party in April, after the CCDI’s investigation found that he had embezzled public funds and accepted bribes, the CCDI’s website said.
Chairmen and CEOs of state-owned and joint-stock banks are considered senior Party members and hold ministerial and vice-ministerial ranks within the Party hierarchy. Generally, the chairman or CEO also serves as the bank’s Party secretary in charge of the bank’s Party organization, which discusses central policies and Party ideology.
In May, Yang Jiacai, an assistant to Guo Shuqing, the current chairman of the China Banking Regulatory Commission, was fired after he was found to have accepted bribes and to have illegally used his position to help his son with his business.
In August, Li Changjun, former head of Export-Import Bank of China’s Beijing branch, was stripped of his Party membership and dismissed from his position, according to the state-run Xinhua news agency, after he was found guilty of bribery and trading sex for political favors. The bank, one of the three institutional banks in China chartered to implement state policies, is subordinate to the CCP’s State Council.
Also in August, Yao Zhongmin, vice president and deputy chief of the Party committee at the China Development Bank—another bank under the jurisdiction of the State Council—was sentenced to 14 years in prison and fined 3.5 million yuan ($528,920), according to Xinhua, for helping “his related entities” obtain loans, while illegally accepting bribes totaling 36.19 million yuan (about $5.47 million).
In September, Wang Jianhua, Party secretary of the Bank of Jiangsu—a regional commercial bank with assets totaling 1,563 billion yuan (about $236 billion)—was expelled from the Party after he was found to have illegally purchased houses at low prices, accepted bribes, and engaged in inappropriate relationships with two women, according to the CCDI’s website.
On Nov. 6, Lin Xiaoxuan, chief information officer at China Minsheng Bank—the first joint-stock commercial bank established in 1996 and owned mostly by nongovernment enterprises—was expelled from the Party, according to the CCDI’s website, after he was found to have accepted bribes and illegally helped others to obtain financial benefits.
Rampant corruption might not be the only concern for foreign financial institutions seeking to invest in China. Recently, Bloomberg warned against more foreign ownership of China’s financial firms, calling China’s opening up “a trap,” since the country’s economy is slowing down.
[/et_pb_text][et_pb_text admin_label=”Link/Source” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]
Author: Frank Fang
Source: Epoch Times
[/et_pb_text][/et_pb_column][et_pb_column type=”1_3″][et_pb_code admin_label=”Right Sidebar” saved_tabs=”all” global_module=”48″]Coming Soon[/et_pb_code][/et_pb_column][/et_pb_row][et_pb_row admin_label=”Row” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” use_custom_gutter=”off” allow_player_pause=”off” parallax=”off” parallax_method=”off” make_equal=”off” parallax_1=”off” parallax_method_1=”off” module_class=”blog-more-articles-wrapper”][et_pb_column type=”4_4″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]
[/et_pb_text][et_pb_blog admin_label=”Latest Articles” fullwidth=”off” posts_number=”3″ show_thumbnail=”on” show_content=”off” show_more=”off” show_author=”off” show_date=”on” show_categories=”on” show_comments=”off” show_pagination=”off” offset_number=”0″ use_overlay=”off” background_layout=”light” use_dropshadow=”off” use_border_color=”off” border_color=”#ffffff” border_style=”solid”] [/et_pb_blog][/et_pb_column][/et_pb_row][/et_pb_section]