China’s financial sector told to expect new wave of graft scrutiny

Xiang Junbo, former chairman of the China Insurance Regulatory Commission (CIRC)
Lintao Zhang | Getty Images
Xiang Junbo, former chairman of the China Insurance Regulatory Commission (CIRC)

Graft-busters are expected to once again set their sights on the financial sector after several senior industry figures came under investigation, according to state media.

The warning came after Yang Jiacai, assistant chairman of the China Banking Regulatory Commission (CBRC), was reportedly placed under investigation in relation to a loan scandal in Hubei province.

Without confirming the investigation, a commentary posted on Sunday on the social media account of People's Daily, the Communist Party mouthpiece, said Yang's "disappearance" was a sign the corruption crackdown in the financial sector had entered a "deep water zone" – a euphemism for a crucial and difficult period.

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Mainland news portal Caixin reported on Saturday Yang was placed under investigation on April 9 over his possible connection to the scandal. Yang had been relieved of his duties, according to the report.

A number of senior officials in charge of financial affairs have recently fallen under suspicion for graft, including Xiang Junbo, head of the China Insurance Regulatory Commission, and Li Changjun, former president of the Beijing branch of the Export-Import Bank of China.

"The anti-corruption campaign in the financial sector is taking shape, just like the wind sweeping through the building heralds a rising storm in the mountain," the commentary said.

Since Guo Shuqing took over the CBRC in March, it has reviewed nearly all the documents it issued that deal with regulation, according to the People's Daily.

The CBRC has also issued new circulars about regulation in recent weeks, some of which served more like guidelines on preventing graft, it said. One circular called for the appointment process for senior officials to be cleaned up, citing past cases where the wives of senior officials were offered jobs in exchange for favours.

Gu Liping, wife of Ling Jihua, who was once top aide to former Chinese president Hu Jintao, was employed in a division of China Minsheng Bank for three years under the arrangement of the bank's former chairman Mao Xiaofeng, the commentary said, citing mainland media reports.

Yu Lifang, the wife of Su Rong, a former deputy chairman of the Chinese People's Political Consultative Conference, was offered a senior job on the board of directors at the same bank. In other instances, the wife of a former Hebei province party secretary and the wife of a former National Statistics Bureau chief were offered senior roles at Galaxy Securities.

The CBRC carried out 485 administrative punishments and levelled 190 million yuan (HK$214.36 million) in fines in the first quarter, according to the commentary. Nineteen people were disqualified from senior positions.