Two Determined Graft-Busters Put in Senior Posts at Banking, Insurance Watchdogs
China has put two vigorous graft-busters in top positions at the country’s banking and insurance regulatory commissions — a strong message that upgraded anti-corruption investigations can be expected throughout China’s financial system.
The two graft-busters are 45-year-old Li Xinran, the newly appointed head of discipline inspection at the China Banking Regulatory Commission, and 51-year-old Lin Guoyao, the new head of discipline inspection at the China Insurance Regulatory Commission. Both Li and Lin took up their posts in late September, replacing former heads nearing the mandatory retirement age, according to the regulators’ official announcements.
The personnel reshuffle will possibly lead to another round of investigations into financial regulators who are in office and those who have already left, according to a source close to the discipline inspection body of a financial regulatory authority. The investigations won’t rule out top-level executives of financial institutions, the source told Caixin.
Meanwhile, market participants are focused on the government’s pending decisions on how to deal with companies suspected of colluding in graft cases. For example, the maze of capital use by Anbang Insurance Group Co. and conglomerate Tomorrow Holdings Group Ltd., are still under special investigation by the central authorities, the source said.
Since 2016, the central discipline commission has been tightening supervision over China’s central bank and the three key financial regulators — the China Banking Regulatory Commission, the China Insurance Regulatory Commission and the China Securities Regulatory Commission. The tightening is part of China’s intense anti-corruption campaign, which began in 2012. Before 2016, each regulator had its own internal inspection department that probed potential misdeeds by employees.
In July at the National Financial Work Conference, President Xi Jinping reiterated the importance of financial stability and the disruptiveness of regulatory corruption.
“Financial regulators should cultivate a solemn regulatory environment,” Xi said. “Under such an environment, each failure to detect financial risks should be regard as negligence of duty, and each failure to alert and handle financial risks should be regarded as misconduct.”
At least four top-level securities, banking and insurance regulators have fallen during the campaign period, including then-assistant chairman of the securities regulator Zhang Yujun, then-vice chairman of the securities regulator Yao Gang, then-assistant chairman of the banking regulator Yang Jiacai and then-chairman of the insurance regulator Xiang Junbo.
Now the recent appointment of Li — who has a history of tackling corruption — and Lin — who has been working in government bodies in Fujian province for his over two-decade-long career — signal that the anti-graft campaign won’t be coming to an end in the near term, even as the key National Party Congress approaches in mid-October.
Li: a go-getter who tackles ‘big tigers’
Li, born in 1972 and one of the former party leaders of Lhasa, the capital city of the Tibet Autonomous Region, has participated in a slew of top-level corruption cases. These include ones involving then-Politburo member and Chongqing party chief Bo Xilai, and his successor Sun Zhengcai, in a new case.
Li was a go-getter in the central discipline commission system, where he worked for more than two decades, sources told Caixin. During Li’s time as the director of the No. 6 Discipline Inspection Office at the central discipline commission from March to November in 2015, Shangguan Yongqing, a former party secretary and president of state-run Shanxi Guoxin Investment Group Co., was detained over bribery and corruption allegations.
After shifting his duties to anti-corruption work in six eastern provinces and a municipal city, including Anhui, Jiangsu, Zhejiang and Shanghai from late 2015 to Sept. 2017, Shanghai's vice mayor, Ai Baojun, and vice governor of Anhui Province Chen Shulong were among several “big tigers” who fell under investigation for "severe disciplinary violations."
Sources from the banking regulatory commission, Li’s new workplace since late September, told Caixin that Li is quite different from his predecessor, the mild-mannered Du Jinfu. Li is known for bold moves that arouse shock and awe.
Lin said, stay clear of Xiang
Lin was born in 1966 and served as an official in the Xiamen city government and the provincial government of Fujian province. His appointment to the insurance watchdog was widely seen as a demonstration of the government’s growing emphasis on tackling regulatory problems in the insurance industry.
Lin took his post even though the new chairman of the insurance regulator has not yet been announced, after the previous chairman, Xiang Junbo, became the subject of an investigation in April.
Lin started as head of discipline inspection at the insurance regulator by calling an internal meeting on Tuesday. He announced the central discipline watchdog’s decision to expel Xiang from the party and office, and reiterated that the insurance regulator should learn from Xiang’s case and clean up his harmful influence to rebuild its reputation.
Lin will be one of the six representatives from the insurance industry to join the National Party Congress, which gets underway on Oct. 18.
Lin’s predecessor, Chen Xinquan, will keep his post on the insurance regulator’s party committee but has retired as the head of its discipline office. During his 12-year-long stint at the watchdog, the 63-year-old Chen worked along two chairmen of the insurance regulator, Wu Dingfu and Xiang Junbo.
Chen is still a member of 18th central discipline commission’s committee, which held its Eighth Plenary Session on Monday to discuss and approve a work report to be submitted to the National Party Congress, according to information garnered by Caixin.
Contact reporter Leng Cheng (firstname.lastname@example.org)
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