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Tue, Jan 18, 2005 - Page 12 News List

Dozens of Chinese officials arrested in ICBC loan scam

AP , BEIJING

Chinese authorities have arrested dozens of government officials and others accused in a scheme to steal 7.4 billion yuan (US$900 million) from a state bank through fraudulent loans, news reports said yesterday.

Prosecutors intend to file charges against 69 people including former employees of the Industrial and Commercial Bank of China, one of the country's four main state-owned commercial banks, according to China's official Xinhua News Agency.

The government has dismissed 80 officials accused of colluding in the scheme and some of them are among those being prosecuted, the China Daily newspaper said.

China's major state-owned banks are undergoing intensive audits in an effort to tighten their controls before they try to raise capital by selling shares on foreign stock exchanges.

According to investigators, the scheme at ICBC was led by businessman Feng Mingchang, who was found to have defrauded the bank's branch in Foshan, Guangdong Province, the news reports said.

Dozens of bank and government officials are accused of forging false letters of credit and proof of land and property in order for Feng to receive loans, they said.

More than 2 billion yuan (US$240 million) still has not been recovered, according to reports.

The case adds to a string of multimillion-dollar bank frauds uncovered at Chinese state banks in recent years.

The government announced last November that auditors had found fraudulent transactions at ICBC totaling 6.9 billion yuan (US$840 million) from 2000 to 2002.

It wasn't clear whether that report was related to the latest announcement of prosecutions.

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