Lai Xiaomin found guilty of taking bribes totalling $279m, other acts of corruption and bigamy
The former head of one of China’s biggest asset management companies has been sentenced to death for corruption, in a relatively rare instance of the country meting out the death penalty for financial crimes.
Lai Xiaomin was chairman of Huarong Asset Management at the time of his arrest in 2018. He was found guilty of taking bribes totalling Rmb1.8bn ($279m) over a 10-year period, other acts of corruption and bigamy.
The court in the northern city of Tianjin, where Lai was sentenced on Tuesday, said his crimes “caused serious losses to the interests of the country”.
According to state media accounts, Lai deposited Rmb300m in a bank account nominally belonging to his mother and stashed tonnes of cash at his home in Beijing.
Chen Long at Plenum, a Beijing-based consultancy, said death sentences for corruption without a reprieve, after which they are usually commuted to life sentences. were now “extremely rare”. “The corruption amount was probably a record and Huarong’s losses possibly larger,” Mr Chen said.
In 2018 the deputy mayor of a city in northern Shanxi province was sentenced to death for taking bribes exceeding Rmb1bn.
Huarong was one of four asset management companies originally established in 1999 to take bad debts off China’s largest state-owned banks, in order to help them lower their non-performing loan ratios and prepare for stock market listings. The four AMCs absorbed bad loans with a total face value of $800bn, although their market value was a fraction of that amount.
Huarong was paired with Industrial and Commercial Bank of China, the country’s largest lender, and absorbed bad loans valued at Rmb408bn.
But instead of winding down after selling off the bad loans, the AMCs evolved into giant financial conglomerates in their own right.
Under Lai’s leadership, Huarong raised vast amounts of capital and expanded aggressively into investment banking services. In the five years through 2018, China’s four largest AMCs raised more than $100bn from debt markets, with Huarong accounting for about half of their total issuance.
Huarong, which listed on the Hong Kong stock exchange five years ago, also developed its own brokerage, insurance and leasing arms, as well as non-financial businesses including property development. Caixin, a leading finance magazine, reported that 100 properties developed by a Huarong subsidiary in south China were distributed to Lai’s ex-wife and mistresses.
Huarong’s rapid expansion, as well as the high-yield loans its investment bank clients sometimes struggled to repay, eventually attracted scrutiny from regulators as President Xi Jinping’s top economic adviser, vice- premier Liu He, ramped up a series of campaigns against risky financial practices.
Following Lai’s arrest, Huarong made an unprecedented offer to swap share certificates bearing his signature with new ones signed by his successor.
Source: ft.com, Tom Mitchell, January 5, 2021
China Court Sentences Ex-Banker to Death for $260M Bribes & Bigamy
BEIJING (AFP) — The former chairman of one of China’s largest state-controlled asset management firms was sentenced to death Tuesday for soliciting $260 million in bribes, corruption, and also bigamy.
Lai Xiaomin, a former Communist Party member, gave a detailed televised confession on state broadcaster CCTV last January, which showed footage of safes and cabinets stuffed with cash in a Beijing apartment allegedly belonging to him.
Lai had abused his position in attempting to obtain the vast sum, a court in the northern city of Tianjin said, describing the bribes as “extremely large” and labelling the circumstances “particularly serious.”
He had shown “extreme malicious intent,” the court ruling added.
The former chairman of the Hong Kong-listed China Huarong Asset Management Co. — a distressed debt group — was also found guilty of bigamy after living with a woman “as man and wife for long periods” outside of his marriage and fathering illegitimate children.
Huarong is one of four companies set up in 1999 to help clean up bad debt piles choking China’s banking system, and the company later expanded into investment, loan and property businesses.
Lai’s downfall began in April 2018 as investigators removed him from his job and stripped him of his party position.
He was also alleged to have used his position to embezzle over $3.8 million in public funds between 2009 and 2018.
During his TV confession, Lai said he “did not spend a single penny, and just kept it there… I did not dare to spend it.”
He had referred to the apartment where he kept the money as the “supermarket”, given his regular visits there to deposit cash.
Luxury cars, gold bars
CCTV showed luxury cars and gold bars reportedly accepted as bribes by Lai, who worked in the central bank and the China Banking Regulatory Commission prior to his leadership roles in Huarong.
The channel often broadcasts interviews with suspects admitting to crimes before they have appeared in court — a practice that has long been condemned by lawyers and rights organizations as forcing confessions under duress.
The court said Lai would have all personal assets confiscated and be stripped of his political rights.
Photos published by the court showed Lai standing up and facing the judge to be sentenced, flanked by two police officers wearing face masks.
The sentencing brings an end to one of the country’s biggest financial crime cases, and comes as Beijing takes an increasingly tough stance on corporate wrongdoing.
Critics say the wide-ranging anti-corruption campaign launched under President Xi Jinping has also served as a way to target his opponents and those of the Communist Party leadership.
Since Xi came to power, many high-ranking officials have been jailed, although only one is known to have been executed — Zhao Liping, who was convicted of homicide in 2016.
China keeps data on its use of the death penalty secret, although rights group Amnesty International estimates the country is the top executioner globally — with thousands executed and sentenced to death each year.
Three other senior Communist Party members have been sentenced to death but later given a reprieve.
The former head of Interpol, an ex-spy chief and a Xinjiang governor accused of “trading power for sex” are some of the other high-profile officials to suffer spectacular falls from grace in recent years in the anti-corruption purge.
Source: Agence France-Presse, Jing Xuan TENG, January 5, 2021
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"One is absolutely sickened, not by the crimes that the wicked have committed,
but by the punishments that the good have inflicted." -- Oscar Wilde
