The governing bodies of China's private equity industry have not escaped the intense scrutiny springing from corruption allegations against high-level executives in the country.
This week, one of the top officials at China’s National Development and Reform Commission (NDRC), Tienan Liu, has been sentenced to life imprisonment for bribery and abuse of power at the Intermediate People’s Court in Hebei Province, China, state media has reported.
Liu had earlier been found guilty of taking more than RMB 35 million ($5.67 million; €4.57 million) in bribes from five companies between 2002 and 2012, including petrochemical producers and carmakers.
Sacked in August 2013, Liu was formerly deputy chief of the NDRC, which until one month prior had been widely accepted as the main regulator for private equity in China. While the China Securities Regulatory Commission (CSRC) is now the primary industry regulator, the NDRC remains responsible for the formulation of policies to promote the private equity industry, which includes issuing regulations on private equity investments from China’s government institutions.
On Wednesday, the Langfang City court ruled that Liu “took advantage of his post to seek gains for others, illegally took cash or gifts from others by himself or via his son [Decheng] Liu,” according to reports.
The news comes just one week after Liang Li, chief of the Investor Protection Bureau at the CSRC, was placed under investigation by a Communist Party watchdog, after suspicions emerged over him allegedly “violating laws and principles”, according to local media citing a confirmation by the government regulator.
Li was detained by the Central Discipline Inspection Commission's sixth office, which has started cracking down on corruption in various regions, including the northern province of Shanxi, where a string of corrupt officials and former government employees have been uncovered recently, reports said.
The CSRC, which had been competing with the NDRC for its place as the private equity governing body, officially emerged as the industry’s new regulatory authority in July last year, and has since implemented a number of new rules and clarifications for GPs operating in the country.
The regulatory body has also previously come under fire for its top officials offering IPO approvals to companies related to their business connections or high-level officials.