The bigamy conviction got a lot of the attention but Lai Xiaomin received a death sentence on Tuesday over a much more serious issue troubling China.
Lai oversaw China Huarong Asset Management Co. from 2012 until he ran into trouble in 2018. He was found guilty of receiving 1.79 billion yuan ($277.3 million) in bribes, with bigamy thrown in for good measure. Still, capital punishment for this kind of white-collar crime is unusual, legal experts say. Wu Xiaohui, former chairman of Anbang Insurance Group Co., whose clean-up is costing Beijing billions of dollars, was sentenced to 18 years in jail over a $10 billion fraud in 2018.
So what is Beijing trying to signal? Who’s the intended audience of this harsh sentence? Other rich and privileged people? Should Alibaba Group Holding Ltd.’s founder Jack Ma be worried? Though he hasn’t been charged with any crime, he has disappeared from the public eye since the suspension of his $35 billion Ant Group initial public offering in November.
At first glance, it may be meant as a reminder to naughty business tycoons of Beijing’s lethal legal arsenal. But the punitive measure against Lai is more likely part of the Communist Party’s internal housekeeping. With Donald Trump and the COVID-19-related economic slowdown out of the way, President Xi Jinping is going back to his war on shadow banking, which he started in earnest in late 2017. Beijing wants to set an example for bureaucrats, to show what can happen to those who do not heed their corporate deleveraging mandate.