Communist party officials in China have been banned from investing in private equity funds in a move aimed at tackling “the myriad corruption risks” of cadres indirectly taking shares in companies, according to a report by the Financial Times, which said that President Xi Jinping’s anti-graft drive was intensifying and shaking up the finance sector.
The ban follows an order last year for top officials and their relatives to report any private equity investments or roles they held in the industry, as state media said the anti-graft agency had uncovered cases of officials providing benefits to groups they invested in via private-equity funds and people reaping “huge gains” after companies were helped to sell shares in public markets, the report said, adding that private-equity firms had “long been a draw for the ‘princeling’ sons and daughters of top officials.
Read the full report: The FT.
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