The China Banking and Insurance Regulatory Commission (CBIRC) has announced the imposition of hefty penalties upon a total of five Chinese financial institutions for a range of regulatory infractions.
CBIRC announced on 4 September that it had applied administrative penalties worth 320 million yuan (approx. USD$46.77 million) to China Minsheng Bank, Zheshang Bank, Guangfa Bank , Huaxia Bank and Huarong Company as well as their relevant executive staff.
Minsheng Bank was fined 107.8294 million yuan for illegal conduct including the provision of financing to real estate enterprises for land acquisitions and real estate projects that lacked adequate documentation.
CBIRC issued warnings to eight Minsheng Bank executives alongside fines worth 50,000 yuan.
Zheshang Bank incurred a fine of 101.2 million yuan for selling wealth management products to “falsely shift assets off balance sheets” as well as interbank investment infractions, while seven of its executives incurred fines of 300,000 yuan.
Guangfa Bank was fined 92.8306 million yuan for infractions including selling wealth management products to unqualified investors to invest in equity assets and the provision of credit to affiliates. One Guangfa executive received an administrative fine of 50,000 yuan.
Huaxia Bank was hit with a 1.1 million yuan fine for failure to properly implement internal controls, resulting in “severe systemic risk hazards that led to adverse consequences.” One Huaxia executive was banned from the banking sector for life, while six other executives received fines of 100,000 yuan.
Huarong Company received a fine of 20.4 million yuan for infractions including the purchase of loans and the purchase of non-non-performing assets from other financial institutions in breach of regulations. Two executive staff received fines worth 50,000 yuan.