China’s Banking Crackdown Picks Up Pace With Fresh Probe

(Bloomberg) -- Chinese authorities have launched a probe into the former chairman and party chief of state-owned China Everbright Group, the latest sign that the country's crackdown on corruption in the financial sector is picking up pace. 

Li Xiaopeng is suspected of “serious violations of discipline and law,” the Central Commission for Discipline Inspection and the State Supervision Commission said in a one-sentence statement. 

The announcement came after the anti-graft body said last week it will start a fresh round of checks at more than 30 state-owned companies. As part of the inspection, they will also “look back” at five financial firms that had been previously targeted, including China Everbright Group.

China's $60 trillion finance industry is being rocked by a clampdown that has become its most extensive since beginning in late 2021. It comes amid a broader push to rein in risks in the sector as policy makers seek to restore growth, manage the economic fallout of frayed ties with the US and step up their charm offensive with foreign business and private industry.  

Authorities late last Friday warned top banking executives that the campaign is far from over, just as they were about to announce the probe of the most senior state banker in nearly two decades, Bloomberg News reported previously. 

Officials from the China Banking and Insurance Regulatory Commission and the anti-graft watchdog called in top executives from at least six big state-owned banks to address the probe of Bank of China Ltd.'s former Chairman Liu Liange, according to people familiar with the matter, who asked not to be named as the information is private.

Founded in 1983 by China's finance ministry and Central Huijin Investment Ltd., China Everbright Group is a financial conglomerate that spans the banking and securities industries.

The latest probe, coupled with the warning, adds to evidence that President Xi Jinping's anti-graft campaign in the financial sector is gaining traction even after the claim of initial success last year. At least 20 financial executives have been probed or penalized since late February. 

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