China's anti-corruption unit sends inspectors to 25 financial companies

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China's anti-corruption unit sends inspectors to 25 financial companies

BEIJING - - The Chinese Communist Party's Anti-Corruption Unit has sent inspectors to 25 financial companies, including top state-owned banks in what appears to be a crackdown prompted by the Evergrande debt crisis.

Fifteen teams of the Central Commission for Discipline Inspection will conduct a two-month review of institutions, pushing them to hold fast to the bottom line of no systemic financial risks, the People's Daily, the Communist Party's official journal, reported Thursday.

The probe comes as China Evergrande Group, the world's most indebted property developer, missed its third bond interest payment in less than a month, fueling fears of an imminent default unless a cash infusion arrives. The group's disorderly, debt-fueled pursuit of growth has come at a time when Chinese President Xi Jinping has been calling for common prosperity. Institutions under investigation include the People's Bank of China – the country's central bank – and the big four state-owned banks of Industrial and Commercial Bank of China, China Construction Bank, Bank of China and Agricultural Bank of China. Conglomerates like Citic Group have also come under scrutiny.

The Shanghai Stock Exchange and China Huarong Asset Management, a bad-debt manager whose former chairman was sentenced for corruption, are on the list as well.

China's leadership has been disturbed by the lending institutions extended to Evergrande. The Communist Party is set to reshuffle its leadership at the party conference in 2022, Xi appears to be asserting more control over the financial sector by keeping its largest players under watch.

The Chinese government has also been cracking down on Didi Chuxing, the financial unit of e-commerce giant Alibaba Group Holding, as well as on the ride-hailing app Ant Group (Wave). There is speculation that banking and investment in these companies will also face scrutiny in the Bank Prosecution.