Caixin
Aug 24, 2018 08:55 PM
FINANCE

This Week’s Movers and Shakers

The four likely new “chief officers” at the China Banking and Insurance Regulatory Commission are (from left) Xiao Yuanqi, Yang Liping, Liu Fushou and Ma Xueping. Photo illustration: Caixin
The four likely new “chief officers” at the China Banking and Insurance Regulatory Commission are (from left) Xiao Yuanqi, Yang Liping, Liu Fushou and Ma Xueping. Photo illustration: Caixin

* Major leadership changes are planned at the China Banking and Insurance Regulatory Commission

* Zhang Jinliang will become the new chairman of the Postal Savings Bank


The World of Finance

Regulatory shake-up starts to shape up: More details on the merged banking-insurance super regulator emerged this week, giving a much clearer picture of what the body will look like.

Who’s in charge of who’s in charge: A five-member team led by the first China Banking and Insurance Regulatory Commission (CBIRC) Chairman, Guo Shuqing (郭树清) — who’s also Communist Party head over at China’s central bank — is deciding major personnel changes.

A pointier pyramid: Guo will have a slimmer leadership team, losing three of his seven deputies — although we don’t know who’s on the way out yet. But he’ll make up for his lost deputies with four new “chief officers” below them, equal in rank to “assistant chairman,” a post most infamously held by Yang Jiacai (杨家才) at the former China Banking Regulatory Commission (CBRC). Yang was sentenced to 16 years in prison last month for accepting tens of millions of yuan in bribes.

Here are the likely candidates, and their roles. There are no big surprises here — all have plenty of experience. As expected, controlling risks has been bumped up in importance.

Risk control: Xiao Yuanqi (肖远企), former director of the CBRC’s prudential regulation bureau. Xiao’s got a fairly international background, with an MBA picked up in the U.K. and experience at the central bank’s New York office.

Inspection: Yang Liping (杨丽平), former director of the CBRC’s large-scale bank department, with plenty of time in several other departments at the banking regulator.

Legal affairs: Liu Fushou (刘福寿), former legal affairs head of the CBRC. Liu should have a good idea of what happens when insurance meets the law — he helped draft China’s Insurance Law in 1995.

Accounting: Ma Xueping (马学平), former chief accountant of now-defunct China Insurance Regulatory Commission (CIRC). Ma was at the CIRC for 20 years, mainly in Shanghai. He’s also worked at the People’s Insurance Company (Group) of China Ltd., one of the country’s largest insurers.

More losers lower down: The two former regulators’ combined 37 central departments will shrink to 26. Consolidation will repeat itself at regional and local levels. This means many heads are going to roll. “As the integration unfolds, competition among midlevel officials will be very fierce,” a local banking regulatory official previously told Caixin.

Why this is all happening: Sharper (and more disciplined) teeth are needed to scare China’s unruly financial sector into submission. Lax oversight and fragmented rules allowed financial institutions to give regulators the runaround, as well as encouraging corruption — Xiang Junbo (项俊波), former head of the CIRC, and the aforementioned Yang Jiacai are the most famous cases.

 

Telecoms, Banking Musical Chairs

Zhang Jinliang (张金良), a veteran banker and former president of midsize lender Everbright Bank Co. Ltd., will become the new chairman of the Postal Savings Bank Co. Ltd. of China (PSB), after being appointed general manager of its parent company, China Post Group Corp., the state-owned operator of the postal service.

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Zhang Jinliang. Photo: IC

PSB Rundown: The PSB certainly isn’t China’s biggest bank by assets — but it’s probably the most ubiquitous, with around 40,000 outlets serving about half a billion retail customers.

Telecoms Connections: Brace yourself — this gets a little complicated:

Zhang replaced Li Guohua (李国华), who last month moved to become general manager at China Unicom, one of China’s big three state-owned telecoms companies.

Zhang’s colleague at China Post Group is its new chairman, Liu Aili (刘爱力), who, also last month, moved over from being president at China Telecom, another of the big three.

Rumor has it that simultaneous moves at the top of these two telecoms giants signal an upcoming merger — just in time for efficiency gains during the rollout of 5G networks, the next generation of wireless technology. There’s precedent — the last round of mergers was just before the 3G rollout in 2008.

Who knows what’s really happening: The ruling Communist Party’s Organization Department, which oversees official and state-controlled company executive appointments.

 

Fugitive Fallout

Another chapter in the Guo saga: Five senior employees of the colorful billionaire fugitive Guo Wengui (郭文贵) pleaded guilty to charges of coercion in a business deal and embezzlement, in a court in the northeastern seaport of Dalian.

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Guo Wengui

Why do we care: The case has brought to light details on how Guo leveraged government connections in his financial dealings before he fled China.

According to court testimony, Guo had asked now-disgraced former vice state security minister Ma Jian (马建) to threaten China Minzu Securities Co. Ltd. shareholders and potential bidders to yield to a takeover from Guo’s company, Beijing Zenith Holdings Co. Ltd. Guo then embezzled over 2 billion yuan ($291 million) from Minzu, using the company as his “wallet.”

 

A Losing Bet

More fallout from the troubled bad bank: The chairman of a casino development company who had close ties to the scandalous “bad bank” China Huarong Asset Management Co. Ltd., was detained by police in Cambodia this week.

Landing International Development Ltd. said in a filing on Thursday that it has been “unable to contact or reach” its chairman, Yang Zhihui (仰智慧). Yang was very close to Bai Tianhui (白天辉), the former general manager of Huarong’s Hong Kong-listed arm, sources told Caixin.

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Yang Zhihui. Photo: IC

Some background: Huarong was established in 1999 to take over toxic assets in China’s banking industry. Earlier this year, its former chairman and Communist Party chief, Lai Xiaomin (赖小民), was removed for “serious violation of rules and the law”; 270 million yuan of cash, weighing nearly 3 tons, was found stashed across several properties he owned. Here’s more from Caixin about Huarong.

Contact reporter Ke Baili (bailike@caixin.com)

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