Foreign-exchange chief to head China Construction Bank

China's chief Guo Shuqing (郭樹清) was yesterday appointed chairman of China Construction Bank (CCB, 中國建設銀行) to replace Zhang Enzhao (張恩照), who has resigned amid a series of corruption allegations at one of China's top four banks.

Guo, director of the State Administration of Foreign Exchange (SAFE) and vice-governor of the central bank, was given the role in an apparent move to improve the bank's image ahead of a planned initial public offer (IPO) abroad.

He was appointed the CCB's Communist Party chief last week, the official Xinhua news agency reported, which cited the bank's board of directors as calling him "a man of strategic vision, strong sense of reform and innovation."

Xinhua that in becoming chairman he relinquished his roles at the foreign exchange regulator and the central bank.

On Thursday the bank, China's third largest lender, pledged to clean up its operations ahead of a share sale, most likely in Hong Kong, which it hopes will raise between US$5 billion and US$10 billion dollars.

"The Construction Bank will follow the instructions of the China Banking Regulatory Commission and continue to fight against illegal behavior by strengthening its management," a bank spokesman was quoted as saying by Xinhua.

"Internal control will be beefed up in a small number of branches with frequent fraud cases," he said.

Zhang Enzhao resigned for "personal reasons" last week, a day after Hong Kong media reported that he was suspected of corruption and put under house arrest.

His son Zhang Jigang, who goes by his Cantonese name Cheung Kei-kong, has since disappeared from his investment banking job at global banking giant HSBC in Hong Kong, reports have said.

A US lawsuit filed in December claims his education in the UK was financed by bribes accepted by his father.

In the California lawsuit, mainland consultancy and services firm Grace and Digital Information Technology accuse Zhang of having accepted US$1 million in bribes from American supplier Alltel Information Services.

Xinhua Guo as saying he would "work closely with the whole bank and make efforts to continuously push forward the bank's reform and development, and build the CCB into a modern commercial bank with an international competitive edge."

Doubts corporate governance at the bank -- and at others also planning to list such as Bank of China -- have increased recently after a series of fraud scandals costing millions of dollars.

Reports last month that US$8 million had gone missing from one of the CCB's branches in northeastern Jilin Province, along with one or two bank officials.

China the listings will force the banks to become more accountable to the public and less dependent on state funds for help.