Bank of China, the country's second-largest commercial lender, faces a fresh corruption scandal as it prepares to offer shares in Hong Kong this year, state press reported.
Officials at a Bank of China branch and a businessman embezzled 96 bank bills and cashed them for 914.6 million yuan (US$113 million) over the past three years, said China's most reputable financial magazine, Caijing.
Police arrested Fuqiang and Oils Trading group boss Zhu Dequan (
Five bank officials, including the former head and deputy head of Bank of China's Shuangyashan city Sima Road sub-branch in Heilongjiang, have been named as suspects.
The Sima sub-branch last month published an urgent notice in a mainland financial newspaper to announce the cancellation of 34 of the bills.
The official Xinhua news agency said the bank could lose 400 million yuan from the fraud.
The Bank of China's media office was not available for comment when contacted yesterday.
The scandal is the latest to hit the corruption-plagued bank in recent years.
Three former Bank of China officials have been accused of stealing four billion yuan between 1992 and October 2001 in China's biggest bank fraud.
The three fled to the US to avoid embezzlement charges, however one was extradited back to China and two are before US courts.
Bank of China announced in June last year it had found 16 new fraud cases involving 30 million yuan (US$3.6 million).
That followed revelations of a massive mortgage scam two months earlier in which a property developer in Beijing used fake documents to obtain about 644 million yuan (US$77 million) worth of loans.
Gao Shan (高山), the former head of a sub-branch in Heilongjiang's capital of Harbin, also vanished with US$120 million of clients' deposits in March last year.
Revelations of the latest scam in Shuangyashan comes after the lender filed preliminary documents last week with the Hong Kong stock exchange for its H-share offering.
Six foreign investors have bought into Bank of China ahead of the listing.
A consortium led by Royal Bank of Scotland that included US investment bank Merrill Lynch and Hong Kong-based business tycoon Li Ka-shing (李嘉誠) last year agreed to buy a 10-percent stake in Bank of China for US$3.1 billion.
Swiss banking group UBS also sunk US$500 million into the Beijing-based lender in an agreement announced in September, while the Asian Development Bank has a US$75million equity investment.
Bank of China sold a 5-percent stake last month to Singapore's Temasek Holdings for just over US$1.5 billion.
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