(Reuters) -China’s former securities watchdog chief Yi Huiman was taken away by authorities last week for an investigation, people with knowledge of the matter said.
Yi was unexpectedly ousted as chairman of the China Securities Regulatory Commission (CSRC) in February last year amid a brutal selloff in domestic stock markets that pushed the benchmark index to a five-year low and left institutional and retail investors scrambling to cut their losses.
The Chinese authorities did not give any reason for Yi’s removal at that time.
The sources, who declined to be identified due to the sensitivity of the matter, said that Yi was being investigated for alleged corruption, including whether his relatives obtained improper benefits during his tenure as the CSRC chief. They did not provide further details.
Yi could not be contacted for comment. Officials at the CSRC, the State Council Information Office, which handles media queries on behalf of the Chinese cabinet, and the country’s top anti-graft body Central Commission for Discipline Inspection (CCDI) did not immediately respond to Reuters requests for comment.
China was rocked last year by corruption probes into high-profile individuals ranging from a deputy central bank governor to a former chairman of its biggest oil and gas company, adding to unease in an economy struggling to secure a firm footing and a society grappling with a fading sense of wealth.
The list also included a top Chinese admiral, Miao Hua, whose fall from grace came as Beijing was trying to modernise its armed forces and boost its battle readiness.
The CCDI has vowed to “resolutely” crack down on corruption in the financial sector. The CCDI, which roots out and punishes corruption within the 97 million-member ruling Communist Party, is extremely powerful and operates above state oversight.
Yi, a veteran of the Industrial and Commercial Bank of China - which he joined as a junior loan officer in 1985 – was appointed to head the CSRC in January 2019.
Before joining ICBC, he spent a year working at the Hangzhou city bureau of the Chinese central bank. Yi, 60, served as the CSRC chairman from January 2019 to February 2024, when Wu Qing replaced him.
‘SITTING BY A VOLCANO’
Domestic media and industry participants often liken the position of the CSRC chief to “sitting by a volcano crater” to illustrate the difficulty of leading the agency and overseeing China’s volatile financial markets.
Yi’s five-year tenure at CSRC was marked by several ambitious reforms aimed at modernizing China’s capital markets, boosting financing for the country’s technological innovation and improving market efficiency.
Under Yi, the CSRC advanced several major reforms in the world’s second-biggest stock market, including the STAR Market, China’s Nasdaq-style high-tech board which started trading in Shanghai in 2019, and the establishment of the Beijing Stock Exchange in 2021 to facilitate funding for innovative small and medium-sized companies.
The CSRC under Yi also embraced a registration-based IPO system which replaced the previous approval-based IPO system, under which companies had to go through strict vetting process by the regulator.
Yi’s tenure as CSRC chairman also saw a wave of high-profile IPOs by Chinese companies, both at home and offshore.
The most notable IPO story during his tenure was the dramatic suspension of fintech giant Ant Group’s planned dual listing in Shanghai and Hong Kong in 2020. At the time, Ant, poised to be valued at around $315 billion and aiming to raise $37 billion – a world record – had its IPO abruptly shelved at the last minute by Beijing.
Chinese authorities pulled the plug on the IPO and later cracked down on founder Jack Ma’s business empire after he gave a speech in Shanghai earlier that year accusing financial watchdogs of stifling innovation.
(Reporting by Reuters staff; Editing by Kim Coghill)
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