(Bloomberg) — The Communist Party has expelled its first official over corruption charges relating to the “disorderly expansion of capital,” a slogan central to President Xi Jinping’s crackdown on huge tech companies.
China’s anti-corruption agency ousted Zhou Jiangyong, former party secretary of Hangzhou — the base of Jack Ma’s Alibaba Group Holding Ltd. — for serious violations of official duties, taking bribes and abuse of power, it announced in a Wednesday statement.
“Zhou Jiangyong has lost his ideals and beliefs,” the Central Commission for Discipline Inspection said. “He covertly opposed central government plans, colluded with capital, supported the disorderly expansion of capital, engaged in superstitious activities and deliberately resisted probes.”
That marked the first citation of “disorderly capital” in a CCDI corruption case, according to a Bloomberg News review of the body’s statements. Zhou, who was put under investigation in August, was also accused of colluding with family members to receive huge bribes, according to the statement. His case is now with prosecutors.
Zhou’s expulsion comes a week after a state media documentary claimed the former party secretary of the eastern Chinese tech hub used his influence to help his younger brother’s businesses. One of those companies had received investment from a firm controlled by Ma’s Ant Group Co., according to a local media report in August.
Over the past 17 years, Hangzhou-based Ant has grown rapidly from a PayPal-like operation into a full suite of financial services. Ant now faces a regulatory overhaul and has been told to rectify its units including lending, insurance and wealth management.
Disorderly Capital
China’s anti-graft authority vowed last week to target “disorderly expansion of capital” when investigating corruption in monopolistic platform companies, a shift in language for the organization.
“Efforts will be made to investigate and punish corrupt behaviors behind the disorderly expansion of capital and platform monopolies, and cut off the link between power and capital,” the CCDI said. “Show no mercy to those who engage in political gangs, small circles, and interest groups within the party, and strictly educate, manage and supervise young cadres.”
Chinese regulators began a campaign against monopolies to prevent the ‘disorderly expansion’ of capital after snuffing out Ant’s $35 billion initial public offering in November 2020. That crackdown has snowballed into an assault on every corner of China’s tech sphere as Beijing seeks to end the domination of a few heavy weights and create a more equitable distribution of wealth.
The CCDI also announced Wednesday that He Xingxiang, a former vice president of China Development Bank, was expelled from the Communist Party for “serious” law violations including the misuse of financial approval rights, which had created major risks and “huge losses” for the country.
China last year launched a national inspection of financial institutions and regulators, which has snared more than 20 officials in the sector.
(Updates throughout)
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