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China Orders More Than 200 Top Officials to Quit Company Jobs

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July 23 (Bloomberg) -- More than 200 senior Chinese officials were ordered to quit company jobs they held at the same time they were working in the government, in a move meant to root out conflicts of interest and corruption.

The demand was made after the Communist Party’s Organization Department passed a rule in October banning government and party officials from also holding outside jobs, the official Xinhua News Agency reported yesterday. A department task force found that 40,700 officials -- including 229 at the provincial or ministerial levels -- had extra jobs.

President Xi Jinping has been waging an anti-corruption campaign since he took office in 2012 with warnings that graft and conflicts risked the Communist Party’s legitimacy. The Organization Department said banning senior officials from businesses would help build “a sound market order,” according to Xinhua.

The Organization Department order triggered an “an exodus” of independent directors from about 300 listed companies in Shanghai and Shenzhen, the Economic Observer newspaper reported today.

Ba Shusong, deputy director of financial research institute at the Development Research Center, stepped down as an independent non-executive director at China Minsheng Banking Corp., a post he’d held since 2012, on July 22. The center is a government think tank under the State Council, China’s cabinet.

Ba resigned because the research center required its staff to quit corporate posts, according to a statement posted on Minsheng’s website.

Under current regulations, retired officials can work for companies as long as they can prove the new positions are not related to their previous ones.

The organization department will encourage the public to blow the whistle on violators of the rules, Xinhua said.

To contact the reporter on this story: Ting Shi in Hong Kong at tshi31@bloomberg.net

To contact the editors responsible for this story: Andrew Davis at abdavis@bloomberg.net Nicholas Wadhams

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