Former Bank of China CEO Detained on Corruption Allegations

17 Oct, 2023

Former Bank of China CEO Detained on Corruption Allegations

In a significant development within China's ongoing anti-corruption campaign, Liu Liange, the former head of one of the nation's largest commercial banks, Bank of China, has been arrested on charges related to accepting bribes and illegally granting loans. This move comes as part of a two-year-long effort targeting corruption in the financial sector.

The Central Commission for Discipline Inspection (CCDI), responsible for probing corruption within the Communist Party, confirmed Liu Liange's arrest. The investigation had been initiated back in March, and this recent development underscores China's commitment to addressing corruption at all levels.

President Xi Jinping has been steadfast in his mission to combat corruption, making it a core element of his political agenda as China's paramount leader. Over the past two years, numerous bankers and financiers have come under scrutiny as authorities focused on cleansing the financial sector. The CCDI has also cautioned the financial industry against indulgence and extravagant lifestyles, prompting many banks to cut bonuses and executive pay.

Xi's vision emphasizes that the financial sector should prioritize serving the real economy, which faces challenges like sluggish growth and high youth unemployment.

Among others facing investigation or charges within the financial sector is Wang Yawei, a prominent fund manager in China. Wang Bin, the former chair of China Life Insurance, one of the country's largest insurers, received a suspended death sentence after being found guilty of corruption in a recent court verdict.

Liu Liange's expulsion from the Communist Party, which occurred last week, was driven by allegations made by the CCDI. The accusations included importing prohibited publications, taking illegal bribes, and enjoying entertainment at exclusive clubs and ski resorts. The charges were extensive, encompassing ideological lapses, such as deviating from party beliefs and resisting the implementation of Communist Party decisions, in addition to financial and governance improprieties.

Bank of China holds a prominent position among China's "big four" state-owned banks. It is considered one of the top 11 globally significant banks, playing a pivotal role in the global financial system, as recognized by the Financial Stability Board. Additionally, it ranks as the world's fourth-largest bank by assets according to S&P Global Market Intelligence. While it operates commercially, it remains state-owned, distinguishing it from the People's Bank of China, the country's central bank.

At the time of writing, Bank of China had not issued a statement regarding the recent arrest.