Once high-flying China asset manager sentenced to death for corruption

'Lawless and extremely greedy' Lai Xiaomin, former chairman of China Huarong Asset Management, convicted of receiving or seeking bribes totalling $277 million; he was said to have at least 100 houses, with a mistress or 'additional wives' or family in them

by George Russell and Chris Gill
Once high-flying China asset manager sentenced to death for corruption
Lai Xiaomin, right, celebrates as China Huarong Asset Management lists in Hong Kong in 2015.  File photo by Reuters

(ATF) The former chairman of one of China’s biggest asset management firms has been sentenced to death for corruption.

Lai Xiaomin, who once headed China Huarong Asset Management Co and was one of the country’s most visible financial figures, was convicted of receiving or seeking bribes totalling 1.788 billion yuan ($276.72 million) from 2008 to 2018.

"Lai Xiaomin was lawless and extremely greedy," the Secondary Intermediate People's Court of Tianjin said in a statement.

The court confiscated all his personal property after convicting him of corruption, bigamy and several other crimes.

The court found that from 2008 to 2018, Lai Xiaomin served as a director of the General Office of the China Banking Regulatory Commission, then top posts on the party committee of China Huarong Asset Management Corp, chairman of the board and secretary of the Party Committee of Huarong Xiangjiang Bank.

As well as having power and status, he had influence over the behaviour of staff in other countries, plus relevant departments and individuals in obtaining finance, contracting projects, providing assistance in cooperative operations, transfer of work, and job promotion power. He illegally accepted and requested property given by related units and individuals directly or through related parties – amounts that totalled more than 1.788 billion yuan. At least 104 million yuan of this has not been recovered and was declared as is an attempted crime.

The money and other assets that he received in the form of bribes, as well as any bank interest from them, would be sought and recovered before being turned over to the state coffers, the populist daily Global Times said on Wednesday. 

It said the court found that Lai had taken advantage of his positions to help others with fund-raising, tenders, promotions and job transfers.

Xiaomin used the authority of the head of a state-owned financial enterprise to determine major company projects in violation of regulations. He ignored regulations in specific projects, sought illegitimate interests for others, endangered national financial security and financial stability, and his case was as having an extremely bad social impact.

China Huarong said the company's Communist Party committee supported the verdict.

"The severe treatment of Lai Xiaomin reflects the strong determination of the Central Committee … to administer the party and its zero tolerance in punishing corruption," the company said in a statement.

Gifts to ex-wife and mistresses

According to state media accounts, Lai deposited 300 million yuan in his mother’s bank account and kept tonnes of cash at his home in Beijing. 

Caixin, a finance magazine, reported that 100 properties developed by a China Huarong subsidiary in southern China were distributed to Lai’s ex-wife and multiple mistresses. He also had children by other wives that he lived with for some time.

China Huarong was one of four asset management companies (AMCs) established in 1999 to take a total of $800 billion in bad debts off China’s largest state-owned banks to help them lower their non-performing loan ratios and prepare for initial public offerings. 

Instead of closing down after selling off bad loans, the AMCs evolved into giant financial conglomerates in their own right. Under Lai, China Huarong raised vast amounts of capital and expanded aggressively into investment banking. 

Although Lai Xiaomin provided clues about major crimes by his subordinates that proved to be true, the court said the circumstances of his acts, plus the degree of harm to society from the bribery he was involved in outweighed any capacity for it to offer him leniency, so the death sentence would be carried out. 

With reporting by Reuters

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