The China Minsheng Banking Co., headquartered in Beijing, reported on Thursday that it had been defrauded of 300 million yuan (US$36.2 million) in a bogus property transaction in south China's Guangdong Province.
The bank, already listed in Shanghai and preparing for a secondary listing in Hong Kong, alleges that a former Guangzhou branch deputy manager colluded with the chairman of the Guangzhou Junpeng Real Estate Co. to steal the money using a falsified acceptance bill.
The fraud was discovered in August 2004 and is still being investigated by the police, who have frozen the 350 million yuan (US$42.3 million) in Junpeng's account at Minsheng.
China Minsheng Banking Co. has so far not reported a financial loss, but the case was listed and reported by the Ministry of Public Security as a major financial fraud case at the end of 2004 before Minsheng's announcement on Thursday.
Ling Min, the former bank branch deputy manager, and Fan Junye, the chairman of Junpeng, allegedly used a fake stamp to produce 40 false acceptance bills, each worth 10 million yuan (US$1.2 million), according to police.
Twenty of the bills were cleared by two rural credit cooperatives in the eastern city of Tianjin early last year, for a loss of 195.5 million yuan (US$23.6 million).
Fan reportedly used the money to buy a real estate project in Guangzhou and to clear his debts.
Minsheng's A-shares closed down 0.43 percent to 4.6 yuan (56 US cents) on Thursday.
The bank received final approval from the China Securities Regulatory Commission last month to issue up to 1.3 billion H-shares, and is waiting for the green light from the Hong Kong Stock Exchange before it begins issuing them.
(China Daily April 22, 2005)
