CHINA MINSHENG PRESIDENT RESIGNS AMID CORRUPTION INVESTIGATION
February 4, 2015
The president of China Minsheng Banking Corp has resigned amid Chinese media reports that he is under investigation by anti-corruption authorities, making him the most senior bank official to be ensnared in Chinese president Xi Jinping’s sweeping anti-corruption campaign. The bank announced Saturday that its president and director Mao Xiaofeng had submitted his resignation “for personal reasons.”
In its statement to the state-run media organization Xinhua, the bank also noted that, “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.” Minsheng named its chairman, Hong Qi, its acting president, but this quick move was not enough to stop the bank’s shares from falling after the announcement hit the domestic and international media.
Mao Xiaofeng joined Minsheng in 2002 and worked in its retail banking, micro-financing and corporate businesses before becoming the youngest bank president in the country last year. Before joining Minsheng, Mao earned a master’s degree at Harvard University and served in the Communist Youth League and as an official in Hunan province.
In December, Ling Jihua, who was a top aide of former president Hu Jintao, became the latest senior official to be targeted by President Xi’s anti-corruption campaign. News outlets are now reporting that that the two cases are linked.
The government’s investigation into Mao has dragged the rampant power-for-money deals between senior officials and financial leaders into the spotlight, analysts say. Hu Xingdou, an economist at the Beijing University of Technology, said government control of the banking sector has always meant that there was potential for corrupt officials to interfere in banks’ operations. “The banking system can be a hotbed for the devious because existing government monopolies allow party officials to take decision-maker posts, causing many corrupt officials using it as their private coffers to embezzle state assets,” he said.
President Xi has promised to go after both “powerful tigers” as well as “lowly flies” in his battle against government corruption. If Mao’s investigation can be taken an indicator of events to come, the financial sector’s other tigers had better watch out.
For more information on this topic, consult the following sources:
Wall Street Journal – “China’s Antigraft Drive Turns to Financial Sector“
Financial Times – “President of China Minsheng Quits”
QQ Finance (腾讯财经) – “民生银行之殇：友谊宾馆里的‘政商友谊’”
Compiled and edited by Emily O’Brien