More than 30 officials from the Bank of China are under investigation as domestic and international regulators begin probing the country's largest banking scandal since 1949.
The bank's former president has been forced to step down from his new position with the China Construction Bank following a US investigation into the activities of the BOC's New York branch that ended with the bank paying a massive fine.
Employees at the Guangdong branch of the BOC, the nation's largest lender of foreign currency, are accused of embezzling 6 billion yuan (US$724.9 million) from the bank and transferring the money to overseas accounts over a 10-year period before being discovered last October, reported 21CN Business Herald. Officials haven't explained how the bank employees were able to embezzle so much money or hide their crime for so long.
Three officials from the branch are currently being probed by Canadian regulators, while other BOC employees are being investigated nationwide on suspicion of fraud, the Guangzhou-based newspaper said.
Officials in the BOC's Beijing headquarters were not available for comment yesterday.
Investigators, who began probing the bank in March 2001, are now looking into allegations of illegal loans and other fraudulent practices at branches in the cities of Shanghai, Beijing, Zhanjiang and Ningbo and provinces of Guangdong, Jiangsu, Shandong, Fujian, Hainan and Liaoning.
Li Jinhua, a senior official of the National Audit Bureau who is leading the investigation, said the bureau has discovered 22 cases of loan fraud, possibly involving 35 BOC employees.
Earlier this month, the State Council, China's Cabinet, fired Wang Xuebing, president of the China Construction Bank, who allegedly made fraudulent loans when he was the BOC's president from 1993 to 2000.
Wang's firing follows in the footsteps of a U.S. investigation in the bank's New York branch, which Wang once managed. The New York branch was fined US$20 million earlier this month for loan fraud by the U.S. and Chinese governments.
The BOC reported that 24.17 percent of the loans on its books were non-performing at the end of last year, down 4.07 percentage points from a year earlier. Its total profit was 10.805 billion yuan for 2001, with 8.557 billion yuan generated by its overseas operations.
(eastday.com January 28, 2002)
