China Minsheng Banking Corporation’s (01988.HK) former chairman Dong Wenbiao is said to be under an anti-graft investigation from the Chinese Communist Party’s disciplinary watchdog.
Dong would face shuanggui, a disciplinary measure outside the regular legal system under which party members are detained and interrogated at a restricted time and place, according to Mingjing News, a New York-based portal which often carries gossipy items about the Chinese leadership.
The reported move by the Commission for Discipline Inspection of the Central Committee of the Communist Party of China (CPC) came as Minsheng Bank’s president Mao Xiaofeng stepped down over the weekend, citing personal reasons.
Mao, who had been a rising star at the mainland lender, quit just about half a year into his presidency of what was touted as China’s first privately controlled bank, the Hong Kong Economic Journal noted.
Mao was under scrutiny in a corruption case involving Ling Jihua, former head of the United Front Work Department of CPC Central Committee, according to a Caixin report.
There is also speculation that Mao and Dong were entangled in a fight for control of Minsheng Bank, in a battle orchestrated by the management of Anbang Insurance Group Co., an entity backed by the second generation of the party leadership.
Anbang Insurance has boosted its holding of Minsheng Bank’s A shares 12 times since late November by investing a total of 37.99 billion yuan, sending its ownership to 22.51 percent from 4.99 percent.
The lender’s stock price has surged over 40 percent over the last three months in the mainland, while its Hong Kong-traded shares gained 25 percent.
The uptrend was reversed as media reports surfaced about corruption allegations and the official investigation.
For investors who may be looking to “bottom-fish” in the stock following its recent sharp slide, analysts are urging caution as political risks remain an overhang on the bank, the Journal noted.
Translation by Vey Wong
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