China’s disgraced insurance regulator pleads guilty to taking US$3 million in bribes
Xiang Junbo, the former head of now defunct China Insurance Regulatory Commission, is highest-ranking finance official snared in President Xi Jinping’s crackdown on graft in the financial industry
China’s former insurance regulator pleaded guilty in court on Thursday to taking bribes, state media reported, a year after he was sacked amid the ruling Communist Party’s campaign to rein in financial risk.
Xiang Junbo, the ex-head of the now defunct China Insurance Regulatory Commission (CIRC), is the highest-ranking finance official to be snared in President Xi Jinping’s crackdown on graft in the financial industry.
Prosecutors at a court in eastern Jiangsu province said Xiang had abused his power not only as head of the insurance watchdog, but also earlier in his career while holding senior positions at the People’s Bank of China and Agricultural Bank of China.
The 61-year-old was accused of taking bribes totalling 19.4 million yuan (US$3 million) in exchange for helping organisations and individuals secure contracts, loans, qualifications and personnel promotions, Xinhua reported.
Xiang pleaded guilty to the charges, the report said.
The court did not give a date for sentencing.
Prosecutors said Xiang accepted bribes both directly and through an associate, whom they identified as Yang Guang and said was being prosecuted separately.
The Economic Observer, a prominent Chinese financial newspaper reported that Yang is Xiang’s wife.
The newspaper said also that one of Xiang’s senior personal secretaries at the CIRC had been indicted, while one of his junior secretaries had been sacked from the agency and expelled from the party but was not facing prosecution.
Xiang was removed from his position at the CIRC in April last year during a shake-up of China’s financial sector. He was put under criminal investigation after being accused of issuing operating licences to favoured insurers.
The watchdog no longer exists as an autonomous agency after the government, in an attempt to fend off growing financial risks, merged it with the banking regulator in March.
Xiang was appointed head of the CIRC in 2011. In his six years at the helm the value of China’s insurance industry almost tripled, and several firms grew exponentially.
Much of that expansion came after insurers were granted new permissions not only to raise short-term funds from investors via universal insurance policies, but also to buy equity stakes in listed companies and property projects, turning several of them into aggressive investors.
One of the most notable examples was Anbang Insurance Group, which was established in 2011 following a corporate restructuring, and grew to become a financial behemoth with about 2 trillion yuan in assets.
Much of its growth stemmed from it being granted licences by the regulator to sell “universal insurance policies”, or high-yielding wealth management products that have little to do with traditional insurance.
Since the Communist Party launched a campaign in 2016 to control capital outflows, and deal with growing debt and systemic risk in the financial system, many of those aggressive insurers have come under close scrutiny.
Known for its aggressive acquisition of overseas assets, including the iconic Waldorf Astoria hotel in New York, Anbang was taken under government control in February. Its founder and former chairman, Wu Xiaohui, was last month sentenced to 18 years in prison for fraud and embezzlement to the tune of about US$12 billion. He has lodged an appeal against the charges.