Date
19 November 2017
China has urged government officials and party cadres to avoid taking up directorships in corporate enterprises. Photo: Bloomberg
China has urged government officials and party cadres to avoid taking up directorships in corporate enterprises. Photo: Bloomberg

Over 170 top China officials forced to give up corporate posts

China has seen 173 provincial and ministerial level Communist Party and government officials removed from their positions in corporate enterprises following a directive from Beijing on work rules.

In October last year, Beijing reiterated a policy that bans outside or part-time work by party and government officials, and also stressed that retired officials should follow strict rules and not take paid work.

A special inspection has so far found as many as 40,700 officials have violated the rules, to various degrees. The list included 229 officials at provincial and ministerial levels, Xinhua news agency reported Tuesday, citing a spokesperson from the Organization Department of the Communist Party’s Central Committee which conducted the inspection.

Among the 229 senior officials, 173 have completed the employment separation and exit procedures while the cases of the remaining 56 are under process, the spokesperson said.

The circular from the party organization department has sparked a wave of resignations among independent directors in listed companies in recent months. The list includes serving cadres as well as retired officials.

China Minsheng Banking Corp. (01988.HK, 600016.CN) announced late Tuesday that it has received a resignation letter from independent director Ba Shusong, who is also the deputy director-general of Financial Research Institute under the Development Research Center of the State Council. A filing from the lender showed Ba had drawn an annual salary of one million yuan in 2013.

However, despite the circular, Hong Kong’s former chief executive Tung Chee-hwa said in June that he will join the board of e-commerce giant Alibaba Group as an independent director after the company completes its initial public offering in New York.

Tung is currently the vice-chairman of the 12th National Committee of the Chinese People’s Political Consultative Conference and the founding chairman of the China-United States Exchange Foundation, a non-profit organization in Hong Kong that promotes understanding between China and the US.

Observers noted that technically the state leaders are not allowed to take any role in companies, but Tung’s case could be an exception due to his Hong Kong residency.

Guo Lian, a Beijing-based law firm, had issued an open letter to Tung, urging him to quit Alibaba as it’s’ “not appropriate for a state leader like Tung to serve a company,” Sina portal reported on July 9.

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