China Minsheng Banking Corp. said on January 31 that its president has resigned, shortly after people close to the matter said the Communist Party is investigating him for corruption.
Minsheng said in a statement that Mao Xiaofeng had quit as president for personal reasons. The bank named its chairman, Hong Qi, as acting president.
Mao was taken away on January 25 by the Central Discipline Inspection Commission (CDIC), the party’s graft buster, to help with an inquiry, sources close to the matter said on January 29. Mao has been out of contact since January 27, a source close to Minsheng said.
Minsheng confirmed Mao was being investigated, but said the probe “is unrelated to the bank’s operations.”
The China Banking Regulatory Commission has dismissed Mao as Minsheng’s party secretary, a source close to the bank said.
There have been media reports that several other members of Minsheng are also being investigated, but sources at the bank dispute this.
Several sources close to the bank say that Minsheng executives have met with CDIC officials, including the chairman of the board of supervisors, Duan Qingshan, and the board’s secretary, Wan Qingyuan. The executives were not detained.
The investigation only involves Mao, and “other directors and executives of the bank remain in their positions and are working as usual,” a source at the bank said.
Mao’s case is linked to an investigation into Ling Jihua, a former vice chairman of the country’s top political advisory body, several sources close to the matter said. The CDIC said on December 22 it had started an inquiry into Ling.
Mao had been a rising star in the country’s financial system. He was named Minsheng’s president in August, becoming the youngest leader in the banking sector.
Mao’s resume says he was born in 1972. But a source close to Mao said he was born in 1970, but puts a different year on documents.
Mao joined Minsheng in 2002 and has worked in its retail banking, micro-financing, and corporate businesses. He earned a master’s degree at Harvard University.
Before joining Minsheng, Mao worked for the Communist Youth League in the central province of Hunan and in the capital.
Minsheng was founded in 1996 and is seen as the first privately owned lender in China. The bank had total asset of 3.2 trillion yuan at the end of 2013 and net profit of 42.3 billion yuan for the year, according to its website. Minsheng listed in Shanghai in 2000 and Hong Kong in 2009.
Minsheng executives said at a meeting with analysts on February 1 that a new president will be appointed in April or May after a scheduled nomination of new board members.
Anbang Insurance Group Co. owns more than one-fifth of Minsheng, making it’s the largest shareholder in the bank, according to information from Hong Kong’s stock exchange. Other investors include China Life Insurance (Group) Co., Swiss Bank Corp., Morgan Stanley, JPMorgan Chase & Co., and BlackRock Inc.
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