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Company: Bank of China

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Bank of China suspends two executives

Date Class
3rd Aug 2004 Fraud Investigation
 
Details
Bank of China has suspended two deputy chief executives of its Hong Kong arm over corruption allegations. Bank of China (Hong Kong) floated in 2002, making it the group's showcase. It was formed by pulling together and reshaping several Hong Kong subsidiaries ahead of its listing.

The bank said prosecutors in mainland China are investigating allegations that Zhu Chi and Ding Yangsheng used funds for personal purposes.

Bank of China is preparing for an international stock market debut which could be derailed if it finds itself embroiled in any major scandal.

In a statement on the suspensions, the company said it took the action after receiving notification of the investigation from its parent, Bank of China, which is one of China's biggest retail banks. It said that the allegations referred to funds distributed prior to 2002.

It is the second time this year that the Hong Kong company's affairs have embarrassed its parent. Ex-chief executive Liu Jinbao was arrested in February on suspicion of corrupt lending in connection of the trial of a Shanghai-based property tycoon.

China's financial regulators want to see mainland banks put tighter controls in place on lending and stronger internal inspections ahead of foreign share sales by the country's four top banks. No dates have yet been set for the flotations.

Analysts expressed concern rather than alarm over the latest scandal. Some claim the cleaning up is aimed at clearing the path for Bank of China's overseas listing

 

 

 


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