ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Caixin

How China prevented a Baoshang domino effect

Bank seizure is seen as a milestone in the history of the country's financial system

Baoshang was used as a piggy bank by its largest shareholder to misappropriate billions of dollars, leaving the bank with a financial black hole of 220 billion yuan. (Photo by Caixin)

China's mammoth banking sector will record its first formal bankruptcy case as regulators wind up the debt cleanup at troubled Baoshang Bank, a regional lender at the center of a sprawling financial empire once controlled by fallen tycoon Xiao Jianhua.

Inner Mongolia-based Baoshang will file for bankruptcy as it has been deep in insolvency, the People's Bank of China (PBOC) said in its second-quarter monetary policy report issued Aug. 6. The equity of its original shareholders and unprotected creditors' rights will be liquidated in accordance with law, the central bank said.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more