China probes head of top life insurer in anti-graft campaign

[BEIJING] China's top anti-graft watchdog placed the chairman of China Life Insurance Co under investigation, sending the shares of one of the country's largest insurers down the most in almost 4 weeks.

Wang Bin, the most senior finance industry executive caught up in an anti-corruption drive this 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 2.4 per cent and traded 1.6 per cent lower as of 9.54 am in Hong Kong.

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 US$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.

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 (Jan 8). 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 (Jan 9).

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 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. The stock closed at HK$13.46 Friday (Jan 7).

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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