Corruption in China

Former Huarong chairman facing corruption prosecution after being expelled from Communist Party

Lai Xiaomin, the former chairman of the state-owned asset manager, is accused of cronyism, embezzlement and taking bribes

PUBLISHED : Monday, 15 October, 2018, 2:31pm
UPDATED : Monday, 15 October, 2018, 10:45pm

Lai Xiaomin, the former chairman of China Huarong Asset Management, has been expelled from the Communist Party and will be prosecuted for suspected corruption, China’s top anti-graft agency said on Monday.

Lai, one of the most senior executives to be brought to book in China’s anti-corruption campaign, was accused of a long list of wrongdoing, from cronyism and taking bribes to the embezzlement of public property, the Central Commission for Discipline Inspection (CCDI) said in a statement on its website.

Lai was accused of “blindly and disorderly” expanding Huarong away from its core business in violation of political discipline and the central government’s financial policy, causing an adverse impact, the commission said.

How three tonnes of cash helped bring down Huarong boss

It was not possible to reach Lai or a representative for comment.

Lai engaged in political opportunism and careerism, exchanged power for sex with several women, and flouted frugality rules by frequently accepting entertainment from private business owners in private clubs and high-end restaurants, it continued.

Lai had also arranged company-paid travel for relatives and allowed them to use his influence to seek profit, the CCDI said.

President Xi Jinping has presided over a far-reaching anti-corruption drive since coming to power in 2012, punishing more than a million party members, jailing top military figures as well as retired security tsar Zhou Yongkang, the most senior official toppled for corruption since 1949.

As a senior official of the Communist Party, Lai had lost his belief in communism and had practised “superstitious activities”, the CCDI said.

Chinese corruption inquiry finds US$39 million in cash at homes of ex-boss of Huarong Asset Management

He had been expelled from the party, it said. His illegal gains would be confiscated and the case would be transferred to judicial bodies for investigation, it added.

Lai was removed in April from his post as party chief and chairman of Huarong – one of China’s big four state-owned bad loan managers – and replaced by Wang Zhanfeng, a senior official at the banking regulator.

The next likely step against Lai will be to put him on trial.

Huarong’s Hong Kong-listed shares, which have a market value of HK$56.65 billion (US$7.23 billion) dropped 3.45 per cent around midday on Monday. The shares have lost 62.47 per cent in value since the beginning of the year.