What’s new: Li Guorong, a former bank regulator in Southwest China’s Sichuan province, was expelled from the Communist Party and removed from public office for taking bribes, China’s top antigraft agency said Monday in a statement.
Li, 46, accepted illegal payments related to the failure of troubled Baoshang Bank Co. Ltd. while serving as a senior executive responsible for the bank’s government takeover, the Central Commission for Discipline Inspection (CCDI) said. Li took bribes from entrepreneurs and abused his power to offer them help in loan interest relief, loan issuance and extensions as well as debt restructuring, the CCDI said.
Li was a deputy head of a team appointed by the China Banking and Insurance Regulatory Commission (CBIRC) and the central bank to take over Baoshang Bank in 2019 in China’s first state takeover of a commercial lender in 20 years.
The official was put under investigation in July. Even during the probe, he showed no regret and continued wrongdoing, the commission said. Li’s case was referred for criminal prosecution.
The background: Li joined the predecessor of the CBIRC in 2003 and was transferred to its Sichuan branch in 2016 to act as a deputy director. In 2018, Li became a member of a team sent to Chengdu Rural Commercial Bank Co. Ltd. to study the lender’s risky dealings with controlling shareholder Anbang Insurance Group Co. Ltd.
In February 2021, Inner Mongolia-based Baoshang Bank was declared bankrupt by a court, making it the first Chinese bank failure in decades. The collapse of Baoshang Bank, which was exposed to serious credit risks, sent tremors through the country’s financial markets and rattled investors’ confidence in smaller financial institutions.
Li is among several former CBIRC officials who are under investigation in relation to Baoshang Bank. Xue Jining, a former head of the Inner Mongolia branch of the CBIRC, was accused of receiving over 400 million yuan of bribes.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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