After its high-profile attempt to take over a major property developer failed and made it a target of regulatory scrutiny, Foresea Life Insurance will set up a Communist Party Committee to “improve corporate development capabilities”, according to a company statement.
The statement added that the company decided to have an in-house party committee after President Xi Jinping ordered the enhancement of the party’s leadership in “financial works” at the latest national financial work conference a few days ago.
In October, Xi said that organs of the Communist Party must be the top bosses of all state-owned companies, and that all businesses with government holdings must have party committees.
The ruling party’s presence in the business sector has grown immensely in recent times, reports the South China Morning Post. As of the end of 2016, 67.9% of all Chinese private businesses have party committees, compared to just 53.1% two years prior.
Foresea Life’s parent company, Baoneng, mounted a takeover attempt for Vanke, the second-largest property developer in the country. It met strong resistance from company executives and ultimately failed, but not before exposing Foresea’s shady practices that exposed it to systemic risk.
Eventually, Foresea’s chairman, Yao Zhenhua, was removed from the company by regulators and banned from the insurance industry for 10 years due to falsifying financial information.
