Senior Banking Regulator Yang Jiacai Under Investigation, CCDI Says

(Beijing) -- Yang Jiacai, the assistant chairman of the China Banking Regulatory Commission, is under investigation for suspected corruption, the country’s top graft buster said Tuesday.

The probe is part of an unfolding anti-graft crackdown on the financial sector. Yang is being investigated for "serious disciplinary violations," a euphemism for corruption, the Central Commission for Discipline Inspection (CCDI) said in a statement.

Sources told Caixin that Yang was relieved of his duties April 10, shortly after Xiang Junbo, the former chairman of the China Insurance Regulatory Commission, came under investigation for corruption. The focus by investigators on top regulators indicates a broadening effort to weed out financial market irregularities and official misconduct as China’s top leadership tries to maintain financial stability and contain risks.

"Individual regulators and senior company executives who have embezzled money entrusted to them or illegally colluded with financial crocodiles must be severely punished," said Premier Li Keqiang in late March as he called for heightened efforts to curb financial-sector corruption.

Several lower-level officials and state company executives have also been ensnared in recent months in allegations of financial market violations. They include Liu Qi, a mid-level official in Chongqing’s development and reform commission who was in charge of enterprise bond issuance; Feng Xiaoshu, a former official in charge of reviewing initial public offerings at the Shenzhen Stock Exchange; and Wang Yincheng, vice chairman of the state-owned People's Insurance Group of China.

The Yang announcement by the CCDI came more than a month after Yang disappeared from the public and was relieved of his duties. Yang was in charge of several functions at the CBRC, including general office, human resources, and regulation of non-bank financial institutions.

Yang, a 56-year-old Hubei native, joined the CBRC in 2003 and was promoted to assistant chairman in 2013. Previously, he spent six years in the central bank’s Hubei branch.

Separate sources told Caixin that investigators targeted Yang Jiacai during an earlier probe of a loan scandal in Wuhan that involved Yang Dongping, the former chief risk officer of state-owned BoCom, China’s fifth-largest lender. Yang Dongping was removed from his post and expelled from the party for “abusing his power to do favor for some private businesspeople in loan issuance,” the CCDI said in February. Yang Jiacai and Yang Dongping are old acquaintances in Hubei with “very good relations,” said a source close to the matter.

Several sources with knowledge of the investigation told Caixin that Yang’s wife, who has worked for a financial institution in Shanghai, is also under investigation for having a large amount of money in her bank account from unknown sources. Yang’s son, Yang Hao, who is running a Hubei-based startup offering car-wash services through a mobile app, is also under investigation.

Contact reporter Han Wei (weihan@caixin.com)