Lai Xiaomin, the former chairman of China Huarong Asset Management (Huarong) [2799:HK], a state-owned distressed debt manager, has been officially arrested due to corruption, according to an announcement released by Supreme People’s Procuratorate on November 7. Investigation over Lai’s case started in April and was led by the National Supervisory Commission.
In September, Huarong reported that it would withdraw its application for its A-share listing. The decision came shortly after Huarong published its 2018 annual interim results, which saw a plunge in performance YoY. Around then, Lai came under investigation for graft as well. From a broader perspective, the Chinese government has stepped up crackdowns on corruption, and probing, taking down several top government officials and chiefs of financial institutions. Wu Xiaohui, the former chairman of insurance company Anbang, was under investigation in March due to illegal financing activities, fraud, and embezzlement. Moreover, to tighten internal control, CBRC, the mainland’s banking regulator, appointed Zhou Liang, a former official at China’s Central Commission for Discipline Inspection (CCDI) to be its deputy chief. Zhou later became the vice-chairman of CBIRC when CBRC and CIRC merged.