China economy

China tells prosecutors to get tough on ‘financial crocodiles’ ... and make it snappy

Those who threaten country’s financial stability must be rooted out, Supreme People’s Procuratorate says

PUBLISHED : Wednesday, 23 August, 2017, 6:52pm
UPDATED : Tuesday, 12 September, 2017, 4:01pm

Chinese prosecutors have been told to show no mercy to the “financial crocodiles” who threaten economic stability, in the latest sign that Beijing is prepared to use all of its judicial and executive apparatus to stamp out corruption.

The Supreme People’s Procuratorate on Wednesday issued a strongly worded directive ordering prosecutors across the country to get tough on “those financial crocodiles that make waves [in the markets]” and the “moles” who engage in insider trading and money-for-power deals.

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In particular, prosecutors should step up their investigations into allegations of fraud in securities and futures trading and issuance, and clamp down on irregular information disclosures, misinformation and insider leaks, according to a summary of the notice released by the agency.

The aim of the directive is to curtail the “spread of corruption” in China’s financial industry, it said, adding that it will also “strike hard” against Ponzi schemes.

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The financial sector has already this year seen several high-profile investigations and prosecutions, as President Xi Jinping seeks to curb the “grey rhino” financial risks that threaten both economic growth and social stability.

In January, Xu Xiang, a former high-profile investor, was sentenced to five-and-a-half years in prison and fined 11 billion yuan (US$1.65 billion) for insider trading. In May, both Xiang Junbo, the former chairman of the China Insurance Regulatory Commission, and Yang Jiacai, an assistant chairman at the China Banking Regulatory Commission, were put under investigation for suspected corruption.

A month later, Wu Xiaohui stepped down as chairman of Anbang Insurance Group for “personal reasons”.

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The directive from the Supreme People’s Procuratorate comes as China is gearing up for a major power reshuffle. Just last month, Xi, while chairing a nationwide financial work conference, urged officials across the country to do all they can to reduce risk in the sector.