The Bank of
China, the country's largest foreign exchange bank, confirmed
on Monday that one of its sub-branches in northeast China's Heilongjiang
Province has been involved in financial fraud.
Gao Shan, director of a division in Harbin, has apparently
vanished following the disappearance of over 800 million yuan
(US$96.3 million).
Of this, 330 million yuan (US$39.7 million) is reported to have
been deposited by the Shanghai-listed Northeast Expressway Co and
320 million yuan (US$38.5 million) by Heilongjiang Chenergy Hit
Hi-tech Venture Capital Co.
A bank official said that government departments are
investigating the case, but refused to confirm any details,
including the sums of money involved.
Economists said the scandal was bad news for the Bank of China,
which plans to go public this year, and would have a negative
impact on the bank's reputation.
The bank was selected by central government for a pilot project
to become a joint stock bank.
After being recapitalized by a state injection of US$22.5
billion, the bank reorganized itself into a joint stock company
called the Bank of China Limited in August. By the end of October,
its bad assets ratio stood at 4.55 percent, a drop of 11.73
percentage points from the beginning of the year.
The bank also has a plan to usher in foreign company investors
as equity owners, in an aim to increase its capital strength and
diversify its ownership.
(China Daily January 25, 2005)