Postal Savings Bank of China CEO officially arrested for corruption

Tao Liming’s arrest comes after being jailed for several months.

Tao Liming, Chief Executive Officer of the Postal Savings Bank of China (PSBC), China’s sixth largest commercial bank, is being charged with issuing illegal loans, taking bribes and illegal fund-raising, among other crimes. In addition to the illegal lending charges, Tao is also accused of corruption by misusing the inter-bank interest rate.

Media reports said PSBC illegally issued loans for construction projects to the Hunan department of highways between 2009 and 2010. Tao’s younger brother was allegedly involved in these transactions.

Tao’s brother is under investigation for demanding bribes of up to $1.6 million, related to his work negotiating contracts for a high-speed expressway in Hunan.

Other media reports, however, claim Tao is a victim of some Communist Party officials who want him replaced. “Anti-corruption investigations” have long been used by the Communist Party to install favorites or remove political enemies.

Tao Liming’s arrest could indicate other banking executives might be arrested in the fight against corruption in the banking sector. The new anti-corruption chief Wang Qishan has expertise in finance and economics, and his appointment to head of the Central Commission for Discipline Inspection was seen by some as an indication that the banking sector is being targeted.

PSBC is a commercial retail bank that provides basic financial services, especially to SMEs, rural and low income customers. It has 40,000 branches throughout China.