Chinese regulators have seized control of nine troubled insurers, trust companies and securities brokers, in a sign that the government is still grappling to contain hidden risks within the financial sector.
The state intervention, announced on Friday, represents one of the largest financial takeover operations in recent memory.
At least four of the nine institutions being taken over were linked to detained tycoon Xiao Jianhua, who controlled Baoshang Bank before it came under government ownership last year.
The China Banking and Insurance Regulatory Commission said in a statement late on Friday that four insurers and two trust companies, including Huaxia Life, would be taken over by the regulator in order to "protect the public interest". A group of state-owned insurance and trust companies would participate in the takeovers.
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In a separate announcement released at the same time, the China Securities Regulatory Commission said it would take control of two securities brokers, including large industry player Guosen Securities, and one futures company.
"The takeovers are to regulate the equity and governance structure of these companies and prevent the spillover of risk, and will be conducive to the healthy and stable development of the securities and futures industry," an official from the securities watchdog said.
Several of the companies subject to state takeover are large participants in their sector. Huaxia Life has about $85bn in total assets and employs 500,000 people, according to its website. Guosen Securities is among the top 15 largest brokers in China.
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Chinese authorities have become increasingly concerned over corporate governance at financial groups and last week purged a list of 38 "illegal shareholders" that had used their ownership in banks to get access to cheap loans.
Experts said state action was needed to clean up similar problems throughout the financial system.
"It would be very difficult to solve the problems relying solely on the companies themselves," said Shen Meng, director at Chanson & Co, a boutique investment bank in Beijing. "Only through a regulator takeover can the problems be forcibly dealt with through administrative measures."
Over the past year, the Chinese government has been forced to step in and take control of several financial institutions, mainly banks, that were on the brink of collapse. The state has orchestrated five bailouts of banks since May last year. CEFC Securities, once controlled by the now-detained tycoon Ye Jianming, was taken over by the state in November.
Mr Xiao, a tycoon who was kidnapped from the Hong Kong Four Seasons hotel in 2017, is thought to be under house arrest in Shanghai.