Chinese regulators on Friday, July 17, seized control of a group of financial institutions with connections to the same holding company, in a crackdown by authorities seeking to stem systemic financial risks in a slowing economy.
According to Reuters, most of the small and mid-sized firms taken over have ownership links to Tomorrow Holdings, which has been targeted in a government crackdown on systemic risks posed by financial conglomerates, according to records shown on the national business registration system.
The announcements by China’s securities watchdog and its banking and insurance regulator came a day after China’s state assets regulator vowed to tighten scrutiny on high-risk areas such as finance and real estate in a bid to forestall systemic challenges.
In a previous takeover case involving Tomorrow, the central bank stated the systemic risk posed by the group involved excessive borrowing and misuse of funds from the financial firms it owned.
Tomorrow’s chairman Xiao Jianhua was investigated more than three years ago amid the state-led conglomerate crackdown, and has not been seen since 2017.
Full Content: Reuters
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