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CEO of Chinese bank sentenced to death for stealing $100 million

December 30, 2019

* UN moves towards handing dictatorships power to control the Internet 

Dick Fuld and Jimmy Caine are grateful that in the US, punishment for corporate malfeasance typically amounts to a slap on the wrist. Because after nearly crashing the global economy, the two former bank CEOs got off with barely a slap on the wrist.

If the pair had been running banks in China when all that went down, it probably would have been a different story. For instance, Fuld probably wouldn’t have been alive to sit for all those ten-year retrospective interviews in late 2018 that helped soften his image as the CEO whose recklessness almost destroyed American capitalism from the inside out.

Compare that to this: On Friday, the former chairman of struggling Chinese lender Hengfeng Bank was sentenced to death with a two-year delay by a Chinese court. His crime? He was convicted of illegally pocketing $100 million while his Shandong-based bank headed inexorably toward failure, eventually becoming the latest Chinese regional lender to require a rescue and full-on nationalization by Beijing.

CEO Jiang Xiyun, meanwhile, was convicted of accepting bribes and illegal ‘accounting irregular’ tricks.

Hengfeng Bank said earlier this month that it would issue 100 billion shares through a private placement in one of China’s largest state-led rescues of small Chinese banks.

Here’s more from Bloomberg:

Jiang Xiyun was convicted for moving 754 million yuan ($108 million) worth of Hangfeng shares to his personal account between 2008 and 2013, according to the Yantai Intermediate People’s Court. He also took bribes of more than 60 million yuan together with another bank executive, according to the Thursday ruling. A reprieved death sentence may be commuted to a life sentence if the person shows good behavior within the allotted period.

In China, a death sentence with a reprieve may be commuted to life in prison no parole if the individual shows genuine remorse.

The bank sold new shares for about $14 billion to a group of investors including a unit of China’s sovereign wealth fund and a local government-backed asset management firm.

China’s banking regulator said back in June that the Shandong government was speeding up the restructuring of Hengfeng, a mid-sized bank, that has failed to disclose its financial statements for two years.

The lender had 1.2 trillion yuan ($175 billion) of assets at the end of 2016, according to its most recent annual report.

The Chinese banking sector has been particularly strained after the government shocked the market by taking over Baoshang Bank Co. in late May, the first bank seizure in more than 20 years.

Beijing is scrambling to shore up its banking system, particularly small and medium-sized lenders.

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From → World Watch

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