China’s corruption campaign takes aim at banking sector

Top banker under investigation as anti-graft probe widens its remit

One of the rising stars of Chinese banking, Mao Xiaofeng, the youngest-ever president of a listed bank in the country, resigned as head of China Minsheng Bank ‘for personal reasons’.  File photographer: Nelson Ching/Bloomberg

One of the rising stars of Chinese banking, Mao Xiaofeng, the youngest-ever president of a listed bank in the country, resigned as head of China Minsheng Bank ‘for personal reasons’. File photographer: Nelson Ching/Bloomberg

 

China’s wide-ranging anti-corruption campaign has made itself felt in every area of public life, so it was perhaps only a matter of time before it turned its sights on financial services.

Last week, one of the rising stars of Chinese banking, Mao Xiaofeng, the youngest-ever president of a listed bank in the country, resigned as head of China Minsheng Bank “for personal reasons”, and this could be the first sign of an anti-graft crackdown on banking this year.

Since president Xi Jinping in late 2012 made his pledge to root out graft in China, whether it involves massive wealth accumulated by the powerful “tigers” of the elite or backhanders palmed over to the “flies” at the bottom of the Communist Party, he has taken some significant scalps.

The biggest is Bo Xilai, the former party boss in Dalian and Chongqing who was purged last year, and is serving a life sentence for corruption and abuse of power, while his wife sits in jail for murder.

Since Bo, the biggest “tiger” is former oil boss and security tsar Zhou Yongkang, who was a member of the party’s all-powerful politburo standing committee until 2012 and his trial is expected to take place any day.

‘Assisting investigations’

Mao quit his posts as director, president and other roles in the bank’s special committees, according to a statement filed to the Shanghai Stock Exchange, cited by the Xinhua news agency.

“China Minsheng Bank has noticed media reports concerning president Mao Xiaofeng. As far as the bank knows, the matter is of a personal nature and is unrelated to bank operations,” it said.

Management board chairman Hong Qi will temporarily take his place as president as determined by the board.

‘Significant information’

Cao HepingPeking UniversityGlobal Times

Mao’s case is apparently linked to that of Ling Jihua, a former senior close aide of ex-president Hu Jintao, who the CCDI said was under investigation for “suspected serious disciplinary violation” back in December.

Mao was a child prodigy, who entered university aged 14 and received his doctorate aged 26, before picking up another master’s degree at the John F Kennedy school of government at Harvard aged just 28. He was previously a senior figure in the Communist Youth League.

Social media is rife with speculation about a slush fund paying salaries to a dozen relatives of high-level cadres who do not do any actual work.

One of the major shareholders in the group is Anbang Insurance, which has just bought the Waldorf Astoria, as mentioned elsewhere in Asia Briefing this week.

A day after his resignation, Lu Haijun, a member of the board of smaller rival the Bank of Beijing, was put under investigation for a “serious breach of discipline”, a sign that the anti-graft probe would be widening.

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