The former chairman of Huarong Asset Management has been sentenced to death over bribery, marking more turbulence within China’s financial sector.
Lai Xiaomin, Huarong chairman from 2012 to 2018, was found guilty of receiving 1.79 billion yuan ($277 million) in bribes between 2008 and 2018, according to a court ruling from Tianjin. In addition, Lai was also convicted of bigamy and collusion with others to embezzle 25.1 million yuan ($3.9 million) of public funds.
The ruling noted that although Lai had made significant contributions to the investigation, the severity of his crimes did not justify leniency due to the endangerment to national financial security and financial stability. Lai faces the death sentence and confiscation of all his personal assets.
Bad Debt Conglomerate
Set up in 1999 alongside three other companies to clean up the banking sector’s balance sheet, Huarong eventually shifted from disposing bad loans to a series of diversified financial services under Lai’s leadership including securities, trusts, investments and futures.
Huarong even held a $2.5 billion IPO in 2015 to boost its market valuation then to over $15 billion which has fallen by more than two-thirds since.
Death Sentence in Finance
Numerous individuals linked to the financial sector have come under pressure in recent years including state-linked individuals such as ex-vice chairman of the banking regulator Yang Jicai and ex-CSRC vice chairman Yao Gang, who both faced 16 years of prison.
Even the death sentence has been utilized before in the sector, most notably on ex-Hengfeng Bank chairman Jiang Xiyun in December last year though the penalty could be significantly reduced to life imprisonment should no further crimes be committed in the two-year period that follows.
