China's newly installed president, Xi Jinping, has repeatedly pledged to fight corruption amid rising social discontent over the government wrongdoing and political scandals that have engulfed the party. But the task at hand has been tough.
In January, Xi called for cracking down on "tigers" (high-level officials) as well as "flies" (low-level officials).
Among the falling “tigers” investigated shortly after the 18th National Congress of the Communist Party of China were Li Chuncheng, former deputy party chief of Sichuan Province and the most senior level official to come under scrutiny since Xi became party head last November, and Yi Junqing, former propaganda chief in northern China, who had a rank equivalent to vice minister.
"We must have the resolution to fight every corrupt phenomenon, punish every corrupt official and constantly eradicate the soil which breeds corruption, so as to earn people's trust with actual results," Xi said in a speech at the Central Commission for Discipline Inspection.
Widespread corruption in the public sector remains a threat to China’s economic development. A total of 30 officials at the ministerial level or higher have been placed under investigation for corruption or other job-related crimes over the past five years, China's top procurator said last week.
The past five years have seen the investigation of several high-level officials including Chongqing’s former party boss Bo Xilai.
Bo, once a man tipped for the very top of Chinese politics, was ousted from his post last year after his estranged police chief, Wang Lijun, fled to a U.S. consulate and accused Bo's wife, Gu Kailai, of poisoning British businessman Neil Heywood. Wang didn’t succeed in escaping China, but he did manage to unleash the country’s biggest political scandal in decades.
Gu and Wang have since been convicted and jailed. Bo’s impending appearance has been called "China's trial of the century." As is typical in China’s opaque criminal justice system, no one knows when or where it will be held. Some say it’s the most sensational case of elite political turmoil in China since the "Gang of Four" were tried in 1981, after their power waned following Mao Zedong’s death in 1976.
Yang Kun, former vice president of state-owned Agricultural Bank Of China Limited (HKG: 1288), may soon be prosecuted for allegedly taking bribes from Beijing-based property firm Blue Harbor Properties Co. Ltd. for the development of Solana -- a shopping center in a large park near Beijing's central business district.
According to Caixin, a well-respected financial media outlet, Yang accepted “tens of millions of yuan” from the developer in return for extending about 3 billion yuan ($480 million) of loans to the company since he became vice president of ABC, China’s third-largest lender by assets, in 2004.
Some of the money ABC lent to Blue Harbor might be “missing,” Caixin added, citing anonymous ABC executives. The magazine also claimed Blue Harbor’s owner, Wang Yaohui, “owes big gambling debts.”
Yang, who had worked at ABC for 29 years, resigned from it last July due to what the bank said were “personal circumstances.” He is the highest-ranking bank executive to be investigated since the “Big Four” state-owned banks listed on the market. China’s “Big Four” are: ABC, Bank of China (HKG: 3988), China Construction Bank Corporation (HKG: 0939) and Industrial and Commercial Bank of China (HKG: 1398).
Other cases of corruption in China’s banking sector include:
Zhou Caikang. The former head of a regional branch of China’s central bank was detained in May by the Central Disciplinary Commission of Zhejiang province. Zhou, who was deputy chief and then chief of the People’s Bank of China branch in Jinhua between 2001 and 2003, came under investigation for allegedly accepting bribes from Kinghing Trust and Investment -- the brokerage firm that blew up at the end of 2011. Kinghing is said to have bought an apartment at market price and sold it to Zhou at a steep discount. The Jinhua branch was responsible for the initial approval of a brokerage license for Kinghing.
Tao Liming. The president of Postal Savings Bank of China, the country’s seven-largest bank, was detained in June of 2012 for an investigation into “personal economic issues,” the bank said in a statement. The chief of the bank's financial institutions department, Chen Hongping, was detained at the same time. Tao Liming was officially arrested in late December on criminal charges, including illegal fundraising, taking bribes and making loans illegally.
Zhang Enzhao. The former head of China Construction Bank was sentenced to 15 years in prison in 2006 for accepting more than $500,000 in gifts and bribes. In March 2005, Zhang stepped down as chairman of the bank for “personal reasons.” The Chinese police later detained him, just months ahead of the bank’s planned initial public offering.
Moran Zhang is a finance and economics reporter at The International Business Times. Her work has appeared in the Wall Street Journal Digital Network’s MarketWatch, United...