Bank president probe 'sign' of wider graft war

Shares slide as CMBC banker allegedly linked to high-profile official

The investigation into Mao Xiaofeng, the youngest-ever president of a listed bank in China, could presage a focus on corruption busting in the financial sector in 2015, experts have said.

Mao, 42, president of China Minsheng Banking Corp (CMBC), has been taken away by the Central Commission for Discipline Inspection of the Communist Party of China to assist an unspecified investigation, the Beijing News reported on Sunday, citing the bank's spokesperson.

Mao has submitted his resignation due to "personal reasons," the bank said over the weekend.

Shareholders of CMBC on Sunday showed their confidence in the company's stock, following the bank's statement on Saturday that Mao has resigned for reasons that are not related to the bank's operations, domestic news portal news.cnstock.com reported.

Judging from the publicly available information, the probe into Mao may imply a widening of the anti-graft campaign, said Cao Heping, a professor of economics with Peking University.

If the investigation is verified, it is likely to be testing the waters ahead of a further crackdown of corruption in the financial sector, if significant information can be obtained from Mao with regard to uncovering deeper graft convictions, Cao told the Global Times on Sunday.

According to news portal caixin.com, Mao is allegedly connected to the case of Ling Jihua, a former senior official whom anti-graft authorities announced was under investigation for "suspected serious disciplinary violation" in December.

According to previous media reports, Mao is known for his audacious character and for being a workaholic. The Beijing-based Global People magazine described in an article last September that "working incessantly for 15 hours is almost daily life for Mao."

He was also reported as a man who likes to keep a low profile.

Before joining the CMBC in 2002, Mao occupied a mid-level leadership role at the Central Committee of the Communist Youth League of China.

The fall of Mao might herald sweeping anti-graft probes into the financial sector this year, read a post seen Sunday on the public WeChat account of Luo Changping, former deputy managing editor of Caijing Magazine.

According to Luo, there is a "secret club" inside the CBMC, with the bank paying salaries to a dozen relatives of high-level officials who do not carry out any actual work. People in the club included Ling's wife Gu Liping and Yu Lifang, wife of Su Rong, former vice chairman of the Chinese People's Political Consultative Conference's National Committee.

Although he did not marry until 2012, there has been frequent gossip about Mao's affairs with multiple women, Luo's article said.

Mao's resume on the Internet indicates that he was admitted to Hunan University at the age of only 14 and obtained a doctorate in management from the university at the age of 26. He obtained another master's degree in public administration management from the John F. Kennedy School of Government at Harvard University at the age of 28.

Luo pointed out that Mao might have changed the date of birth on his resume to gain better chances of promotion.

Luo quoted an anonymous source as saying that Mao was forced out of politics as some people had acquired evidence that he had altered his resume.

The information could not be immediately verified.

Together with several senior executives, Hong Qi, chairman of CMBC's board, who is now acting as CMBC's president, held a meeting with analysts from a number of unidentified securities companies and investment institutions on Sunday, to discuss the company's future development.

Major shareholders, including Anbang Insurance Group Co, held faith in the CMBC's development in the long run, and will not consider selling its stake in the bank, Hong was quoted by the report as saying.

Shares in the bank slid 0.5 percent on Friday to HK$9.45 ($1.22), while its Shanghai shares dropped 1.7 percent to 9.47 yuan ($1.51).

Repeated calls to the bank went unanswered as of press time.