The Bank of China (BOC), the country's second largest lender,
has not been affected by the 160 million yuan (US$20.8 million)
loan scandal surrounding its Shenyang branch, the Shanghai
Securities News reported on Monday.
The bank has recovered 120 million yuan from the major
fraudulent creditor by confiscating its assets, announced BOC
spokesperson Wang Zhaowen.
In a BOC investigation into its retail loans in November 2004, a
number of car dealers from Shenyang, capital of Liaoning Province,
were found to have defrauded large quantities of money with forged
documents from the bank's Shenyang branch.
The main borrower behind the scandal, the Shiji Huarong Yafei
Automotive Trading Co., was awarded loans by the branch totaling
160 million yuan (US$20.8 million).
Two of the company's corporate representatives were arrested by
the police in March 2006, with investigations still ongoing. The
company's phone lines have been cut off, and nobody is available
for comment.
BOC spokesperson Wang Zhaowen announced that 21 members of the
BOC's Shenyang branch staff, held responsible for the loans, have
either been demoted or dismissed from the company. The vice
president of the branch, only revealed as being a Mr. Li, was also
dismissed and is currently being investigated for further
liabilities.
Media reports however, claim that Li subsequently fled to the
US, along with his family, at the end of 2006.
Wang did not detail other car dealers involved in loan
scandal.
Wang said the bank has enhanced loan control and only grants its
provincial-level branches the right to approve retail loans
targeted at individuals, households, and medium- and small-sized
enterprises.
According to Wang, as of April this year, the Hong Kong-listed
bank has offered a total of more than 200 billion yuan (US$26
billion) in retail loans, with its non-performing ratio kept within
one percent.
(Xinhua News Agency May 15, 2007)