News on Lai Xiaomin and Huarong happened some time back but I have been so busy that it took me a few months to finally pay attention.
This guy was the head of Huarong Asset Management, one of China's bad banks whose purpose was to clean up bad debts in the system. He abused his position and did sorts of financial crime including accepting bribes, collusion and invested bad money into bad projects.
He embezzled USD258m, the highest amount since the founding of People's Republic of China, enough money to fund the lifestyles of 100 mistresses, bought 100 properties and involved over 100 related persons.
As such, he was sentenced to death and executed 24 days after the sentence was passed. The first instance of someone getting capital punishment for financial crime, as the magnitude is big enough to cause societal problems. I guess Lai qualified, as he might also be partially responsible for the downfall of Huarong (happening now).
The lesson learnt for me here is that managing other people's money is not something trivial. Warren Buffett took it so seriously that he sacrificed his family time, partially his health to make things work. Alas, it usually is trivial, for many who are in for a quick buck. As such they are destined to manage small amounts, and to create negative goodwill because they think it is no big deal losing other people's money.
To truly be a good money manager, we must understand from the bottom of our hearts that this is a sacred job. It is more than just accepting the fiduciary duties of managing money. This is the secret of Warren Buffett's success.
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