When Huarong Asset Management employees arrived at their Hong Kong headquarters on April 18, they found it had undergone a radical transformation. The walls of the company’s offices, which had been covered with images of the chairman Lai Xiaomin , now stood bare. Stacks of glossy books authored by Mr Lai had vanished. It was as if he had never existed, says one employee present that day.

Staff at the subsidiary of the powerful Beijing-based debt manager would soon learn that Mr Lai had been detained in a corruption probe, the latest executive to fall foul of the government. But what was not clear at the time was that Huarong was at the centre of a crackdown on corruption in the financial sector and, in particular, excessive corporate leverage. It is a campaign that has spilled across China’s borders and into global markets.

The curbs on the investment banking operations at Huarong and three other state-owned asset management companies, or AMCs, slammed the brakes on easy access to credit for some of China’s most aggressive buyers of overseas assets. The move led to defaults and fewer foreign acquisitions by Chinese companies.