Corruption in China

PICC’s president Wang Yincheng under investigation by China’s discipline commission

Investigations of Wang makes him the highest-ranking cadre in insurance to take the fall in the government’s crackdown on financial malfeasance

PUBLISHED : Thursday, 23 February, 2017, 8:48pm
UPDATED : Thursday, 05 July, 2018, 9:10pm

Wang Yincheng, president of The People’s Insurance Co (Group) of China, is under investigation for possible corruption, making him the highest-ranking cadre in the insurance industry to take the fall in the government’s latest crackdown on financial malfeasance.

Wang, vice chairman and president of People’s Insurance, the parent of PICC Property & Casualty Co., was taken away for suspected violations of discipline, according to a Thursday statement by the Central Commission for Discipline Inspection. The statement said Wang is suspected of misconduct, the usual euphemism for corruption, without elaborating.

Wang, 57, holds the rank of a deputy minister in China’s bureaucracy by virtue of his seniority as deputy commissar, or Communist Party secretary, of state-owned People’s Insurance. He also sits on PICC Property’s board.

Investigations into Wang indicates China’s tightening noose on the financial industry, in the government’s coordinated crackdowns to impose discipline in Asia’s largest capital market. Insurers, stockbrokers and financiers have been placed under scrutiny for their roles in allowing capital raised from insurance policies to be used for funding takeovers and outsize acquisitions.

“The financial industry has been one of the major sectors targeted by the anti-graft watchdog,” said Hu Xingdou, an economics professor at the Beijing Institute of Technology, noting that healthy growth of the financial sector plays a key role in serving the real economy. “What’s more, a more transparent and open market can help trim the space for corruption and rent-seeking.”

People’s Insurance had lax oversight of executives’ overseas travels, reckless investment decisions, transfer of benefits and nepotism at its subsidiaries, anti-graft inspectors noted in February 2016. It wasn’t clear if Wang’s investigations were related to these issues.

Wang, a 35-year veteran of People’s Insurance, was carrying out his daily routine in Beijing when he was taken away by authorities on January 9, Caixin reported on January 11, quoting sources it did not identify. The report didn’t identify the authorities involved.

He joined People’s Insurance after graduating from Shanxi University of Finance & Economy in 1982, rising through the insurer’s ranks.

Wang was known to entertain senior government officials and financial executives from Shanxi province, Caixin said. Ling Jihua, a disgraced aide to former president Hu Jintao, was also said to have participated in similar gatherings, according to Caixin.

Ling was sentenced to life in prison in July 2016 for taking more than 77 million yuan (HK$89 million) in bribes, illegally obtaining state secrets and abuse of power, according to state media.

In 2015, the high-profile downfall of Yao Gang was also reportedly linked to Ling. Yao, former vice-chairman of the China Securities Regulatory Commission, was investigated for suspected corruption, making him the most senior figure within China’s financial sector to be caught up in the dragnet after the country’s 2015 stock market meltdown.

“Anti-corruption crackdown spares no industry or institution, whether it’s a major state-owned enterprise or government body,” said Zhu Lijia, a public policy professor at the Chinese Academy of Governance.

Shares of PICC Property & Casualty Co. fell 0.2 per cent to HK$12.08 before close of market yesterday, after which Wang’s investigation was announced, while shares of its parent People’s Insurance Co. were unchanged at HK$3.26.