As chairman investigated over graft, China's Huarong told to control risks

FILE PHOTO - Logos of China Huarong Asset Management Co are seen during a finance expo in Beijing, China October 30, 2014. China Daily via REUTERS/File Photo

BEIJING (Reuters) - A senior official at China's banking and insurance watchdog said that the new leadership of China Huarong Asset Management Co 2799.HK must effectively control risks and focus on the company's core business of non-performing assets, according to a statement on the company's website on Sunday evening.

The comments were made by Cao Yu, vice chairman of the China Banking and Insurance Regulatory Commission (CBIRC), at a meeting on Wednesday to announce proposed new leadership for the firm, said the statement from Huarong, one of China’s largest state-owned bad debt managers.

China’s anti-corruption watchdog said on Tuesday it was investigating Huarong chairman Lai Xiaomin for alleged corruption, in the latest string of probes into high-profile financial executives.

“Ensure the steady development of business operations...focus on the main business of non-performing assets, actively serve the real economy, and improve and refine management,” Cao told Huarong’s new leadership.

Bejing has been trying to rein in risks in its increasingly complex financial sector after years of credit-fuelled economic growth raised concerns about risks from a mounting debt pile.

Cao also said the new leaders should promote political and ideological development within Huarong and have a “high sense of political responsibility and mission”.

Huarong on Friday confirmed that Wang Zhanfeng, head of the Guangdong branch of China’s banking regulator, was lined up to be its new chairman.

The Hong Kong-listed shares of Huarong fell nearly 12 percent as shares resumed trading on Friday after being halted earlier in the week.

Reporting by Elias Glenn, Editing by William Maclean