Corruption investigation expands to finance sector

A Chinese man walks past the stand of Bank of Beijing, May 21, 2014. [Photo/IC]

Bank of Beijing Co Ltd Board Director Lu Haijun is being investigated for serious disciplinary violations, the bank said in a statement to the Shanghai Stock Exchange on Tuesday.

Analysts said recent cases involving banks showed that China's anti-corruption campaign has expanded into the financial sector.

Bank of Beijing received a written notice from Beijing Energy Investment Holding Co Ltd about Lu being investigated because he is the former chairman of the company.

The bank said the incident "will not affect its normal operations".

Mao Xiaofeng, former president of China Minsheng Banking Corp, was taken away for investigation on Friday by the Central Commission for Discipline Inspection.

Minsheng shares slid 3.2 percent in Shanghai and 3.1 percent in Hong Kong on Monday. The declines showed that investors regarded the investigation as the beginning of China's anti-corruption campaign in the financial sector, said Mu Hua, a Guangzhou-based analyst at GF Securities Co.

Ni Jun, a Shanghai-based banking analyst, said the anti-corruption campaign may have a bigger impact on small banks such as city commercial banks, compared with large State-owned banks.

"Small banks have close relations with the local governments in terms of business projects and deposits. If the president of a small bank steps down, the personnel change will have a relatively but huge influence on the bank, and the bank will adjust its reliance on political connections," Ni said.

"The operation of large banks, on the contrary, is less likely to be affected by individuals. Even the appointment of a new president will not have a big impact on their performance, which depends more on the macroeconomy."