Former chief of China’s largest financial asset management firm charged with corruption offenses

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Lai Xiaomin, former chairman of China’s largest financial asset management company, was charged with corruption on February 15.

Chinese authorities have alleged that as the former chairman of Huarong Asset Management Co., Lai extorted bribes, colluded with others to embezzle large amounts of public property, and took advantage of his duties to demand undue advantages from those who bribed him. He was also the director of the general office of the banking regulator, the China Banking Regulatory Commission, and also the head of the Chinese Communist Party committee of the Huarong Xiangjiang Bank Co.

Lai was also accused of “living with another woman” while still legally married to his wife.

Since coming to power in 2012, Chinese leader Xi Jinping has launched an extensive anti-corruption campaign to rid the Party of misbehaving officials. The charge of bigamy is unusual, as this charge is rarely used, despite the fact that many corrupt officials have mistresses.

And in November 2017, the Party showed signs that it would tackle corruption in the financial sector by appoint new directors to the central bank of China and two public finance regulators.

Lai was removed from his post on April 17 last year and was officially investigated on October 15. According to an announcement by Chinese authorities, Lai established close relationships with his supervisors and privileged people in an effort to gain promotions, promoted his public image and wasted state property. He was arrested on November 7.

Shortly after his arrest, Bloomberg quoted a person familiar with the matter as saying that Lai’s bribes amounted to around 1.65 billion yuan ($240 million), while investigators from China’s internal anti-corruption watchdog Party discovered that he owned 34 properties. As the investigation is still ongoing, the total amount of the bribes is still unknown.

Meanwhile, Chinese media Economic Observer cited two people familiar with Lai’s case, who said the amount of money in Lai’s corruption case exceeded 1.6 billion yuan ($235.2 million). Additionally, Lai owned a large amount of valuables such as jewelry.

“According to our conservative estimates, together they exceed 2 billion yuan ($295.3 million) in value,” one of the sources told the Economic Observer.

They described Lai’s greed for money as “near madness”.

One of the sources told the Economic Observer: “Lai’s case provided an opportunity to further investigate corruption in China’s financial system. It’s just the beginning.

The source estimated that the large number of corrupt officials would mean investigations to uncover their crimes would take at least three years.

Chinese financial publication Caixin revealed in October 2018 that police found 270 million yuan ($39.9 million) in cash at Lai’s residence. In addition, her mother also accepted bribes in the form of gifts and money, with a total value of 300 million yuan ($44.3 million).

Previously, in the official announcement to withdraw Lai’s Party membership and official positions, it was mentioned that Lai “made a number of deals exchanging power for sex with a number of women” .

Caixin also reported that Lai benefited from his connections with various private companies. For example, Ningxia Province’s richest person, chairman of Ningxia Tianyuan Manganese Industry Group, Jia Tian, ​​is also implicated in Lai’s case.

Year April 23 Caixin report revealed that during his tenure as chairman of Huarong, Lai repeatedly injected money into Tianyuan Manganese with funds totaling tens of billions of yuan, and cultivated it into Huarong’s “ghost company”. The business in turn became a way for Lai to increase his personal assets, according to the report.

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