Cartoons

Leaving his money lying around

huarong-liu-w

The word ‘venal’ first appeared in the English language in the mid-17th century, derived from the Latin word ‘venum’ meaning ‘thing for sale’. The Oxford English Dictionary defines it as “showing susceptibility to bribery; corrupt”.

And an exemplary case of ‘vena’l behaviour came to light in China this month when investigators found three tonnes of banknotes piled up in the properties of a detained public official. The man in question was Lai Xiaomin, the former chairman of China Huarong Asset Management, a state agency set up to clean up bad debts in the banking system but which has morphed over the years into a financial services behemoth.

Lai was detained for suspected graft in April, but it was only later that his properties were searched and the hoards of local cash and foreign currency were found. Counting the cash was no easy feat but Caixin Weekly reports that the haul came to about Rmb270 million ($39.65 million) in total.

On August 12 Huarong issued a warning that it would report “a prominent decrease” in its first half profits and its share price is down about two-thirds since Lai’s arrest. Among its problematic investments is a 36% stake in CEFC Hainan, bought to assist parent firm CEFC China as part of a $9.1 billion investment in Russian oil giant Rosneft. The latter deal failed to complete after CEFC’s boss Ye Jianming was himself detained in February. Only weeks later Lai was arrested too, leading analysts to speculate that the two detentions must be connected.


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