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Thursday
Feb122015

China bank execs under fire for graft

The president and party chief of China Minsheng Banking Corp, Mao Xiaofeng, has resigned after being investigated by anti-graft authorities.

Mao resigned for personal reasons unrelated to the bank’s operations, and the business is running as normal, the bank said in a statement to the Shanghai Stock Exchange.

According to the Caixin news portal, Mao was detained by the Central Commission for Discipline Inspection before he submitted the resignation. Sources told Caixin that Mao was implicated in the corruption scandal of ex-presidential aide Ling Jihua, who was investigated in December.

Mao and Ling both graduated from Hunan University and served together in the Communist Youth League. Ling helped Mao rise in the league and became Minsheng’s president, according to Caijing magazine.

Minsheng’s shairman of supervisory board ,member, Duan Qingshan, was rumored to have been detained in connection with the Ling family’s corruption scandal, which the bank denied.

Sources also disclosed that a number of high-ranking officials’ wives, including Ling’s wife Gu Liping, were paid salaries from Minsheng without actually working there.

Minsheng was founded in 1996 and is now the largest private bank in China.

Separately, Bank of Beijing Co Ltd director Lu Haijun is being investigated for serious disciplinary violations. Lu is the former chairman of Beijing Energy Investment Holding Co Ltd, one of the bank’s shareholders.

Meanwhile, Yang Kun, the former vice president of Agricultural Bank of China (ABC), one of the country’s “Big Four” state-controlled commercial banks, has been sentenced to life in prison for taking bribes of 30.8 million yuan ($5 million).

Sources: Beijing Times (京华时报), Caixin (财新网), Caijing (财经杂志), Financial Times, Reuters

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Hui Zhi is the Senior Manager for Content with the China Compliance Digest, where a version of this post first appeared.