The deputy head of the China Banking Regulatory Commission says that financial regulators will prevent major shareholders and “insiders” from exercising control of banks.
In an interview with China Business Journal, CBRC deputy chairman Wang Zhaoxing (王兆星) said that measures introduced by the banking regulator and the People’s Bank of China both had the goal of “preventing institutions from being controlled by major shareholders, preventing them from being controlled by insiders, and prevent the transfer of interests.”
According to Wang regulators will seek to “strengthen internal administration of shareholders, in order to better improve corporate administration, prevent insider trading, and enable decision-making by financial institutions to be more scientific.”
The remarks come just after CBRC introduced new provisions requiring that shareholders reduce their equity stakes in banks if they were exceed 5%, and were acquired via financial products such as insurance plans or asset management schemes.
In January CBRC also introduced new regulations that seek to curb “malfeasance” on the part of the key shareholders in China’s commercial banks, as well as clarify the precise identity of the end beneficiaries and controllers of equity stakes.