Ex-chief of leading China investment bank arrested

Former head of Ping An Securities suspected of insider trading involving cement firms: Report

BEIJING • Chinese police have arrested a former chief of one of China's top investment banks, in the latest move against leading businessmen in the world's second-largest economy following a market crash earlier this year.

The authorities held Mr Xue Rongnian, who headed Ping An Securities from 2008 to 2011, on suspicion of insider trading in connection to two cement businesses, respected business magazine Caixin reported on Friday.

Police in Anhui province took him into custody around Nov 20, the magazine said. In 2013, China's securities regulator disciplined Mr Xue following allegations that a company Ping An helped take public during his tenure had falsified its earnings, Caixin said.

The news comes as China tightens the screws on officials and businessmen in the financial sector after a market rout earlier this year wiped out trillions of dollars in market capitalisation, sending shock waves across the globe.

The probes are part of a broader anti-corruption campaign that some have called a political purge.

The news comes as China tightens the screws on officials and businessmen in the financial sector, after a market rout earlier this year wiped out trillions of dollars in market capitalisation.

Last April, reports said the Chinese authorities were investigating the former head of China's central bank, Mr Dai Xianglong, whose family members amassed billions of dollars through the purchase of shares in Ping An Securities' parent company.

The deal was detailed in a New York Times expose that also revealed that a company controlled in part by relatives of former prime minister Wen Jiabao benefited from buying Ping An shares.

This week, Mr Guo Guangchang, chairman of Fosun - owner of Club Med and of China's biggest private-sector conglomerates - disappeared from public view before the group announced he was assisting the authorities with a reported corruption investigation.

Fosun Group is due to hold its annual meeting tomorrow, where Mr Guo usually makes a speech, Chinese news portal Sohu said.

He was being questioned in connection with an investigation into former Shanghai vice mayor and director of the Shanghai Free Trade Zone Ai Baojun, it added.

The Communist Party's internal anti-graft body announced last month Mr Ai was under investigation for "severe disciplinary violations", a euphemism for corruption.

Mr Ai's wife was reportedly investigated on suspicion of manipulating the stock market. She died of kidney failure a week before Mr Ai fell.

According to Caixin, Mr Guo was named in a court verdict on Wang Zongnan, head of state-controlled Shanghai retailer Bailian, who was sentenced to 18 years in jail for embezzlement and bribery in August.

A Fosun subsidiary is Bailian's second-largest shareholder, it added.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Sunday Times on December 13, 2015, with the headline 'Ex-chief of leading China investment bank arrested'. Print Edition | Subscribe