Bank of China, one of the big-four lenders in the country, dismissed the general manager of its Shanghai branch last week due to questionable loans to a real estate company.
Zhou Lu lost his position on July 2 because he is held responsible for irregularities found by auditors in lendings to Wantai Group, a Shanghai-based property developer, said Zhang Tao, a branch spokesman.
"These loan fraud cases happened in the 1990s when Zhou was serving as a senior executive in the branch," said Zhang. The branch, the largest forex lender in Shanghai, did not reveal more details on Zhou's activities.
Meanwhile, Huang Zhiwei, general manager of BOC's Jiangsu Province branch, has been appointed by the BOC head office in Beijing to replace Zhou, said Wang Zhaowen, spokesman of BOC's head office, in a telephone interview.
Wantai's Chairman, Qian Yongwei, reportedly has been detained on fraud charges in connection with 1.3 billion yuan (US$150 million) obtained from the BOC's Shanghai branch. Wantai did not have any business income in the first six years since it was established in 1995.
It is suspected that Qian used the loan to acquire Hong Kong-listed Sui Chong Holdings Ltd, which is now renamed as Sun Man Tai Holdings Co. Qian also owns another listed firm in Hong Kong, The Sun Group Ltd, which was formerly known as Pearl Oriental Cyberforce Ltd.
Authorities said last month that Wantai and another Shanghai conglomerate, Nongkai Development Group, were under investigation for possible fraud. No further information has been released.
Nongkai is headed by one of China's richest men, Chau Ching-ngai, also known as Zhou Zhengyi. Chinese authorities say Chau's companies are being investigated for possible offenses that include misusing bank loans to speculate in the stock market.
BOC's Zhou was appointed as general manager of the branch in 1997. Liu Jinbao, the former vice chairman and chief executive officer of Bank of China (Hong Kong) Ltd, was the predecessor to Zhou as general manager of the BOC Shanghai branch.
Graduated from Shanghai University of Finance and Economy in 1983, Zhou has been in charge of forex lendings in the branch since 1986.
Meanwhile, spokesman Zhang said the bank has had a risk-monitoring and control system for several years since Liu Mingkang, the current chairman of the China Banking Regulatory Commission, became president of the BOC's head office in Beijing in 2000.
(Shanghai Daily July 9, 2003)
