China's Anti-corruption Agency Has Financial Sector in its Sights

A series of recent announcements about new policies and regulations suggest that China's financial sector could be headed into a once-a-decade overhaul that would have broad, complex and long-term implications just as the industry girds for a new round of high-level regulatory appointments to be unveiled at the National People's Congress.

Last week, the Central Commission for Discipline Inspection (CCDI), the Chinese Communist Party's anti-corruption agency, published an article on its website titled, "Hold Firm to Win the Anti-Corruption Battle in a Protracted War," criticizing "financial elitism" and calling for a tough crackdown on cronyism, including what it termed "shadow shareholders" and "shadow companies." While the article did not explain the references, they almost certainly refer to those who hold shares or set up a company on others' behalf to conceal the beneficiary's identity.

In this Nikkei Asia article, Capital Markets partner Benjamin Qiu discusses China’s anti-corruption campaign and the CCDI’s proposed crackdown on shadow shareholders and companies. In addition, the author explores the impact of the agency’s authority over state-owned enterprises and the private sector.

[The opinions expressed in this article are the author’s and do not necessarily reflect the views of Loeb & Loeb LLP or its clients. The information included here is not intended to be and should not be taken as legal advice.]

To read the full article please visit Nikkei Asia’s website.