China launches new round of graft busting in finance sector

China’s ruling Community Party turned its sights on the country’s vast financial sector this month, kicking off a new round of a years-long campaign to uncover corruption and illegal dealings.

The country’s top anti-graft watchdog has started a roughly two-month inspection of more than 20 institutions including the central bank, the banking and insurance regulator, stock exchanges, commercial banks and asset-management companies, in its first coordinated inspection of the sector since 2015.

Chinese President Xi Jinping is scrutinising the ties that state banks and other financial institutions have developed with big private companies, the Wall Street Journal reported on Monday, citing people with knowledge of the plan.

The inspections are a comprehensive “political examination” of Party committees at the financial institutions and regulators, according to statements issued by the Central Commission for Discipline Inspection (CCDI) on Tuesday.

CCDI inspectors will be looking for any violation of political discipline – a Party euphemism for corruption.

The inspections follow a call by China’s top anti-graft official Zhao Leji in late September for in-depth inspections at the Party organisations of 25 state financial institutions and regulators.

When the sector was last inspected in 2015, at least a few hundred bankers and executives were censured and even fired. Offences included organising prohibited internal banquets and accepting holidays from clients.

In 2017, Xiang Junbo, the former chair of China’s insurance regulator, was removed from his post after a probe of one of the most senior financial regulators in years. Xiang was sentenced to 11 years in jail in 2020.

In January this year, China executed Lai Xiaomin, the former head of the embattled China Huarong Asset Management Co after being found guilty of taking 1.79 billion yuan of bribes.

On Monday, the CCDI said the former chairman and Party head at Chang’an Bank, based in the northwestern province of Shaanxi, had been expelled from the Party and public office due to corruption.

In recent months, Chinese regulators have also taken aim at sectors ranging from technology to education and property, targeting some of the biggest firms in the country like Alibaba Group and Tencent Holdings. – Reuters

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