China Sentences Huarong’s Lai Xiaomin to Death
The former head of a major Chinese state lender was sentenced to death Tuesday for bribery, corruption and bigamy. This is a rare and dramatic example of Beijing’s use of the death penalty for economic crimes.
Lai Xiaomin, the former chairman of Huarong Asset Management, was found guilty by a court in the coastal city of Tianjin for receiving bribes of $ 277 million between 2008 and 2018. The government will confiscate his personal property.
Mr. Lai is “lawless and extremely greedy,” Tianjin Secondary Intermediate People’s Court said in a statement Tuesday, adding that his actions endanger national financial security.
58-year-old Lai was one of the most famous figures to have fallen out of favor due to a comprehensive crackdown on corruption by Xi Jinping, China’s political leader. Mr. Lai was expelled from the Communist Party in 2018 for violating the party’s laws and regulations, including misusing his power for sex. He confessed to taking bribes on a television show in the state media last year.
The unusually harsh verdict could send a signal that Mr. Xi is unwilling to ease his anti-corruption campaign, which he began shortly after he took control of the Communist Party in late 2012. The campaign defeated some of its most powerful rivals. But it has also helped contain concerns in China that party officials are becoming increasingly corrupt.
“Sentencing Mr. Lai to death will have a lot of support from the lower and middle class,” said Zhang Peihong, partner at Hui Ye Law Firm in Shanghai.
Economy & Economy
Jan. 5, 2021, 8:35 p.m. ET
China uses the death penalty extensively, although government officials fail to disclose the numbers. But its use for crimes such as embezzlement, bribery, and corruption has declined in recent years due to public disapproval.
The issue was unusually public aired in 2012 when Wen Jiabao, the then-Chinese prime minister, used his nationally televised annual press conference to warn courts overseeing the case of Wu Ying, a young woman who became a business tycoon but for the time being Sentenced to death was financial fraud. Her sentence was later reduced.
Reports of executions for business crimes decreased, although they did not go away. In 2013, officials executed Zeng Chengjie after a court sentenced him for financial crimes. His family claimed that Mr. Zeng was executed before they were told, in an episode that caused trouble online.
In sentencing Mr. Lai, the court chose a high profile target. Mr. Lai took the helm of Huarong in 2012 and helped him expand into new areas like investing and securities. Huarong was formed in the late 1990s to take on failed loans from state-owned companies – a kind of “bad bank” – and to ease the burden of large state lenders trying to sell stocks to the public.
Huarong did deals with some of China’s most prominent private companies at a time when they were feeling ambitious. Among them were CEFC China, an energy company, and HNA, a conglomerate of companies ranging from hotels to airlines. Both came under government scrutiny after officials became skeptical of companies that borrowed heavily to build their business empires.
A high profile death sentence will send a message, though its interpretation depends on the audience, said Joshua Rosenzweig, Amnesty International’s assistant regional director for East and Southeast Asia.
“Many of the messages that the Chinese authorities are trying to send with these rulings are intended to fill in the gaps and come to their own conclusions,” he said.
“This could be a message to the public that the Xi regime is still treating corruption as a serious problem, or it could be a message to the business elite in China that they need to keep their noses clean,” said Rosenzweig. “Or it could be a message to both of them.”
Cao Li contributed to the coverage.