Recasts, adds details
SHANGHAI/BEIJING July 17 (Reuters) - Chinese regulators on Friday seized control of a group of financial institutions with connections to the same holding company, in a crackdown by authorities seeking to stem systemic financial risks in a slowing economy.
Most of the small and mid-sized firms taken over have ownership links to Tomorrow Holdings Co Ltd, which has been targeted in a government crackdown on systemic risks posed by financial conglomerates, according to records shown on the national business registration system.
A source familiar with the matter said all nine are linked to Tomorrow. Calls to the group went unanswered.
The takeovers are effective for one year, regulators said.
The announcements by China's securities watchdog and its banking and insurance regulator came a day after China's state assets regulator vowed to tighten scrutiny on high-risk areas such as finance and real estate in a bid to forestall systemic challenges.
In a previous takeover case involving Tomorrow, the central bank said the systemic risk posed by the group involved excessive borrowing and misuse of funds from the financial firms it owned.
The China Securities Regulatory Commission (CSRC) on Friday said it seized control of New Times Securities, Guosheng Securities and Guosheng Futures. It said the firms had concealed shareholder information, among other rule violations, and that the move will prevent "risk spillover".
The China Banking and Insurance Regulatory Commission (CBIRC) cited business violations in the takeover of Tianan Property Insurance Co of China, Huaxia Life Insurance Co, Tianan Life Insurance Co and Yi'an P&C Insurance Co., as well as New Times Trust Co and New China Trust Co.
The CBIRC said seizing control of individual "high-risk" companies won't threaten industry health.
During the takeover, operations of the institutions will remain normal, regulators said.
(Reporting by Samuel Shen, Cheng Leng, Kevin Huang and Brenda Goh; Editing by Alison Williams, William Maclean)
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