China’s former top securities regulator under investigation

Liu Shiyu, the former head of China’s securities regulator, is under investigation for suspected law violations and has turned himself in, authorities said on Sunday.

Liu, who remains a senior Communist Party official, is cooperating with the probe, according to a statement from China’s Central Commission for Discipline Inspection. He was chairman of the China Securities Regulatory Commission for three years before being replaced in January by Yi Huiman.

Several financial regulators have been brought down in the past few years as President Xi Jinping’s administration kept up a crackdown on corruption. Last year, Yao Gang, the former vice chairman of the CSRC, was sentenced to 18 years in jail for taking bribes and insider trading. Xiang Junbo, the ex-chairman of China’s insurance regulator, was found to have taken bribes of 19.4 million yuan ($2.8 million). He pleaded guilty last year.

Early in his tenure at the CSRC, Liu vowed take on the “crocodiles” and “barbarians” of the market, presaging a clampdown on market manipulation. Under his watch, the regulator stepped up enforcement, sharply increasing the amount of fines it levied.

The CSRC also reduced a backlog of initial public offering applications during Liu’s time in charge. However, two high-profile projects — China depositary receipts, which would allow global technology companies to issue shares in the country; and the London-Shanghai stock connect, a cross-listing program between China and the U.K. — failed to materialize while he ran the watchdog.

Liu joined the Agricultural Bank of China Ltd., the nation’s third-largest lender, in 2014. He had previously been a deputy governor at the People’s Bank of China. Before the PBOC, Liu worked at China Construction Bank Corp. and the nation’s economic reform commission. He holds a master’s degree from the economic management school of Tsinghua University in Beijing.

The official People’s Daily reported in 2016 that Liu was born in a farmer’s family in Guanyun county of Jiangsu province. Shares of the region’s eight banks declined on Monday, led by Jiangsu Zijin Rural Commercial Bank Co., which fell as much as 7.4% while Jiangsu Suzhou Rural Commercial Bank Co. dropped 6.2%. Seven of the lenders based in the province had gone public during Liu’s tenure at the CSRC, data compiled by Bloomberg show.

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China’s former top securities regulator under investigation