China's banking watchdog has penalized 49 staff members of 11
banking institutions who were responsible for funding an
unauthorized power plant that has been criticized by the central
government.
Nine banks and two financing firms for power companies were
responsible for slack examination procedures before approving the
credit and for poor management of the loans to the north
China-based Inner Mongolia Power Group Co., Ltd., which constructed
the plant and other six illegal power projects, said the China
Banking Regulatory Commission.
The disgraced institutions include the country's "big four"
state-owned lenders -- the China Construction Bank, the Bank of
China, the Agricultural Bank of China and the Industrial and
Commercial Bank of China.
The commission did not reveal the specific penalties.
The project, the Xinfeng thermal power plant, came under fire in
August last year, when it was openly criticized by the State
Council, China's cabinet.
Six people died and eight were injured in the construction of
plant, and the power company had failed to follow standard
procedures in project approval, land acquisition and tendering,
said the State Council.
Regional authorities received disciplinary and judicial
penalties for failing to stop the project and enforce the central
government's macro-control policies aimed at curbing investment to
prevent the economy from overheating.
The commission, together with the National Development and
Reform Commission and the National Audit Office, reinvestigated the
legitimacy and management of all bank loans to the power company
from Sept. 18 to 27.
The country's banking institutions must learn from the case and
resolutely implement central macro-control policies, said the
commission.
It urged all financial institutions to strengthen risk
management of large corporate customers and strictly examine the
legitimacy of their credit.
(Xinhua News Agency January 27, 2007)