Chinese Communist Party (CCP) cadres are no longer allowed to invest in private investment funds, the Central Commission for Discipline Inspection (CCDI) warned at the end of October.
According to several state media, the Communist Party’s anti-corruption agency sees investment funds as a tool favoring illicit enrichment: it has discovered cases where officials had granted advantages to groups in which they had invested through private equity funds, including helping companies obtain approval for their IPOs. “They reaped huge gains after the company’s IPO”, the report says. The warning comes as the agency’s anti-corruption efforts have shifted this year to the financial sector.
The article highlighting this new doctrine was published on October 26 by a publishing house belonging to the CCDI, before being taken up by the economic media and widely shared in financial circles, reports the Bloomberg agency. This is in fact an extract from a book published by the CCDI this summer presenting the priorities of the fight against corruption to local authorities.
Consumed by money
Since coming to power, Chinese President Xi Jinping has launched a vast anti-corruption campaign aimed both at improving the image of a party consumed by money and consolidating his hold on it and on the State by eliminating rival factions. At least 1.5 million officials have been sanctioned in ten years.
For a year, the commission has turned its ire towards the financial sector, and more than a hundred executives have already been arrested this year, including several big names in the sector. Bao Fan, co-founder of China Renaissance Bank, which had enabled many technology companies to raise funds, disappeared in February. He “cooperate in an investigation”his company said a week later.
In mid-October, Liu Liange, a former president of Bank of China, and Li Xiaopeng, the former boss of the Chinese state giant China Everbright, specializing in asset management, were arrested for corruption. On Saturday November 4, Zhang Hongli, former vice-director of the Industrial and Commercial Bank of China (ICBC), one of the largest banks in the world, was arrested in turn. He is “suspected of serious violations of discipline and the law”said China’s anti-corruption agency.
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