Death penalty for insider trading in China. The trader earned over USD 70 million

Former president of China Merchants Bank Tian Huiyu illegally earned over USD 70 million. A court in China has just sentenced him to... the death penalty. However, the judge was generous and if Tian Huiyu did not commit any crime for the next two years, the sentence would be commuted to "only" life imprisonment. This shows the contrast between Poland and China, for example. In our country, such offenses probably result in a maximum of several years in prison.

Stock market manipulation and insider trading

The allegations included not only insider trading, but also corruption and accepting bribes. Tian Huiyu, who served as president of China Merchants Bank for nine years, engaged in repeated insider trading. Taking advantage of his position, he had access to confidential information, which he used for personal financial gain. He knew exactly when to sell and when to buy shares of the bank he managed, which resulted in his great results on the stock exchange.

The court estimated that in this way he earned over 290 billion yuan, which is equivalent to over USD 40 million. He didn't earn money himself. For a fee, he also disclosed confidential information about the company to other people, which was to bring him further financial benefits exceeding 8 billion yuan, or approximately USD 1,1 million. He shared tips about the bank's financial condition even before the financial results were published, thanks to which trusted people also earned millions. They are subject to a separate investigation that is still ongoing.

Insider trading is not enough. He still took bribes

In addition to the charges related to insider trading and selling confidential information, the former president of the bank also allegedly accepted bribes worth a total of 290 billion yuan, or over USD 30 million. These bribes influenced decisions regarding granting loans and promotions within the bank's structures, for which employees had to pay the boss, and actually share part of their salaries with him after the promotion. Virtually every high-ranking manager had to pay for his promotion. No wonder someone finally couldn't stand it and reported the whole procedure to the law enforcement authorities.

CHECK: How to invest in Asian Indices? [Guide]

The death penalty for all

The court sentenced Tian Huiyu to death, but... suspended for two years. This means that if he does not commit any serious crime within 24 months, his sentence will be changed to life imprisonment.

The president's abuses became public in April 2022, when he was removed from the position of president of China Merchants Bank amid a growing scandal. The investigation began as a result of tightened supervision over the financial sector in China and the fight against corruption led by the Chinese Communist Party. It began with information from bank employees who learned about the entire structure of the corrupt organization.

The conviction of the former bank president was one of many actions taken to combat corruption in the Chinese financial sector. Previously, presidents of other important institutions, such as Bank of China and China Everbright Group. The Chinese government has placed a firm veto on the growing corruption in the country, also at the highest levels.

About China Merchants Bank

China Merchants Bank, listed on the stock exchanges in Shanghai and Hong Kong, was established in 1987 as the first fully commercial bank in China, formally not controlled by the state. During Tian Huiyu's presidency, the bank significantly increased its lending activity and developed its offer for individual clients as well as in wealth management and private banking.