President of Chinese Private Bank Is Busted for Corruption
The president of China’s largest private bank, Minsheng, was placed under investigation by the Chinese regime’s internal disciplinary agency recently, according to reports by mainland Chinese media.
At 43 years old, Mao Xiaofeng was known in Chinese media as “the youngest Chinese bank president.” He no longer serves in either that capacity—a Jan. 31 announcement by Minsheng Bank confirmed his resignation—or as the bank’s Communist Party secretary.
The same day, Chinese business media Caixin reported that Mao had earlier been detained by the Central Commission for Discipline Inspection (CCDI), ostensibly to assist in the investigation of a high-ranking official. Soon afterward, he was removed from his Communist Party position.
Minsheng’s announcement cited “personal reasons” for Mao’s removal and stressed that his detention had nothing to do with the bank’s business operations.
“Working conditions at Minsheng will remain normal,” the announcement read.
Multiple insider sources told Caixin that Mao’s detention is connected to the investigation of sacked official Ling Jihua, who was formally put under state investigation on Dec. 22, 2014. Suspected of corruption, his case has involved an increasing number of people on the Chinese political and business scene.
Ling Jihua was Mao’s superior between 1999 and 2002, when they worked at a propaganda agency in the Communist Party. They were also fellow students at Hunan University.
According to reports by Caixin and the Beijing Times, Mao Xiaofeng, who took up presidency of Minsheng last August, had a salary of $680,000 in 2009, when he served as the bank’s chairman secretary.
Minsheng Bank, for its part, has come under media scrutiny. In what has been dubbed “the Wives’ Club,” insider sources revealed to the Beijing Times that the company had become a popular establishment for powerful officials to sinecure their wives—where they’d be given comfortable salaries but no work to do.
Gu Liping, the wife of Ling Jihua, apparently falls into this category. With Mao’s assistance, Gu served at the bank for three years. Yu Lifang, the wife of Su Rong, another highly powerful, sacked official, was hired by Minsheng to serve as audit committee director upon retiring from a different position at the bank.
Both officials—Ling Jihua and Su Rong—were extremely powerful and high-ranking members of the Chinese Communist Party. Ling was formerly the director of the General Office of the Party’s Central Committee, and a member of the Party Secretariat—key organs for the flow of documents going to the central leadership. Su Rong was most recently the vice chairman of the National Committee of the Chinese People’s Political Consultative Conference, a kind of faux-advisory body for the regime.
When the Chinese stock market opened on Monday morning, Minsheng’s A shares fell by 6.4 percent. Along with it, other bank stocks, as well as insurance and brokerage firms, also declined by over 2.3 percent, Chinese reports said. Minsheng’s Hong Kong stocks also dropped nearly 10 percent after market open.
Minsheng, founded in 1996, was the first privately owned national-level bank in the China. In 2014, Fortune magazine ranked it 330 of 500 largest firms worldwide. Among outside investors, it was often seen as somewhat outside the formal structures of Communist Party control of the banking sector.