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China broadens graft probe into financial sector

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Reuters SHANGHAI
Last Updated : Feb 03 2015 | 9:45 AM IST

SHANGHAI (Reuters) - Bank of Beijing Co Ltd board director Lu Haijun is under investigation for serious disciplinary violations, the bank said, the latest high-ranking banker to fall under scrutiny as China's anti-corruption drive turns to the finance sector.

The investigation comes after China Minsheng Banking Corp's president, Mao Xiaofeng, resigned on Saturday for personal reasons after media reports that he was being investigated by China's anti-corruption watchdog.

Chinese President Xi Jinping has warned that the problem of official graft is serious enough to threaten the Communist Party's legitimacy and has vowed to go after powerful "tigers" as well as lowly "flies".

Graft-busters have investigated business leaders and politicians alike, including powerful former domestic security chief Zhou Yongkang, and Ling Jihua, once a top aide to Hu Jintao, Xi's predecessor.

Chinese media have connected the fall of Mao with the probe into Ling without giving specific details, except to note they both rose up through the Communist Youth League. Ling was sacked as head of a department which works to co-opt non-communists in December after having been implicated in a scandal over his son's death in a luxury sports car accident.

Neither Mao nor Lu could be reached for comment.

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Mao, once a rising star in China's banking world, had only been named to his post in August.

Bank of Beijing's Lu was the former chairman of Beijing Energy Investment Holding Co Ltd, one of the bank's shareholders, according to a statement posted on the Shanghai stock exchange late on Monday.

The bank was operating normally, the statement added.

The party's graft-fighting body, the Central Commission for Discipline Inspection, said on Friday it was probing Lu, who it identified only as the former chairman of Beijing Energy Investment, although it gave no details.

Beijing Energy Investment holds 5.08 percent of the bank's shares. Bank of Beijing has a market value of 106 billion yuan ($16.93 billion) and operates primarily in the domestic market.

The Chinese government's probe into the financial sector comes as part of a broader campaign to root out corruption at major state-run conglomerates.

The official Xinhua news agency said on Monday that anti-graft teams would be sent into 72 major state-run firms, including 19 in the financial and rail sectors.

($1 = 6.2594 Chinese yuan)

(Reporting by Engen Tham; Writing by Ben Blanchard; Editing by Mark Bendeich and Dean Yates)

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First Published: Feb 03 2015 | 9:43 AM IST

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