China Probes Head of Top Life Insurer in Anti-Graft Campaign
China Life Insurance Chair Wang Bin Under State Anti-Graft Probe
(Bloomberg) -- China’s top anti-graft watchdog placed the chairman of China Life Insurance Co. Ltd. under investigation in a surprise move, sending the shares of one of the country’s largest insurers down the most in almost four weeks in Hong Kong.
Wang Bin, the most senior finance industry executive caught up in an anti-corruption drive launched in October last year, is “suspected of serious violations of discipline and law, and is currently undergoing disciplinary review and investigation,” the China Central Commission for Discipline Inspection said in a statement Saturday, without disclosing more details.
Shares sank as much as 2.5% before paring earlier losses to trade 1.8% lower at HK$13.20. China Life’s yuan-denominated shares fell as much as 3.4% in Shanghai.
The move to investigate the head of the nation’s biggest life insurer, with a market capitalization of around $110 billion, underscores how Chinese President Xi Jinping is pressing ahead with a drive to root out corruption. A nationwide anti-graft crackdown focused on the financial institutions and regulators has taken down more than 20 officials since its start in October as authorities step up scrutiny over the nation’s $54 trillion financial system. Wang is the first high-level financial industry official to be hit by the campaign this year, according to the official Securities Times.
Here is a list of the most high-profile casualties of China’s anti-graft crackdown:
| Name | Title | Company | Date |
|---|---|---|---|
| Wang Bin | Chairman | China Life Insurance | Jan.8 |
| Mou Shangang | Former director of office affairs management bureau | People’s Bank of China | Jan.4 |
| Zhang Huayu | Former vice president | China Everbright Bank | Jan.4 |
| Chen Yaoming | Director | China Banknote Printing and Minting | Dec.22 |
| Guo Hong | Former head of rural, small and medium-sized banks | China Banking and Insurance Regulatory Commission | Dec.22 |
| Wang Yonghong | Former head of science and technology dept. | People’s Bank of China | Oct.20 |
China Life said it would cooperate with investigations and supports Beijing’s actions to cleanse the country’s political and financial systems, according to a statement on Saturday. The company will hold a board meeting in the near future to decide on an acting chairman, it said in a filing to Shanghai Stock Exchange on Sunday.
Business Disruption
The news is expected to cast a shadow over the company’s share price, as investors may have concerns over the insurer’s corporate governance as well as potential business disruptions brought by the leadership change, Citigroup Inc. analysts wrote in a note.
But the probe should have “manageable impacts” on China Life’s operations, which have been mainly led by other executives, as Wang, 64, has approached retirement, said the analysts, whose target price on China Life’s Hong Kong-listed stock is HK$22.
Day-to-day operations depend more on senior management, which has been largely stable, according to Bloomberg Intelligence analyst Steven Lam. The chairmanship, where appointments depend on the government and Communist Party, rotates every few years, he wrote in a note.
Wang previously held posts in China Taiping Insurance Holdings and Bank of Communications Co. before chairing China Life. He had also worked at the central bank.
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With assistance from Bloomberg