Chinese financial regulators on Friday took over nine financial institutions they said broke rules and added risk to a financial system facing increasing headwinds from the coronavirus pandemic, reported the Wall Street Journal.
The takeovers of four insurers, two trust firms and three securities companies that managed a combined RMB 1 trillion ( $143 billion) in assets represent Beijing’s first major regulatory move this year and follows the bailout of several regional lenders last year.
The China Banking and Insurance Regulatory Commission said it would take control of Huaxia Life Insurance Co., Tianan Life Insurance Co., Tian An Property Insurance Co. and Yian Property Insurance Co., according to a statement on its website. Meanwhile, China’s securities regulator said it would take over three other entities—New Times Securities, Guosheng Securities and Guosheng Futures—and two trust firms, New China Trust Co. and New Times Trust Co.
The regulators said the takeovers are aimed at ensuring “stable operations” of the firms. Most, if not all, of the companies have been linked in Chinese media reports to disgraced financier Xiao Jianhua, the founder of Beijing-based Tomorrow Holding Ltd. Co., which also controlled Baoshang Bank Co., a troubled regional lender that was the subject of a high-profile seizure last year.