Quantcast

China bank ex-exec gets suspended death sentence

August 12, 2005

SHANGHAI (Reuters) – China sentenced the former chief of
the Bank of China’s Hong Kong arm to death on Friday on charges
of corruption, but suspended the sentence by two years in an
act that could spare his life.

Liu Jinbao had been accused of embezzling 7.72 million
yuan, the official Shanghai Securities News reported in July,
describing one of the most high-profile cases of the corruption
that dogs the country’s financial sector.

“This morning, the people’s court in Changchun, Jilin
province, sentenced former Bank of China (Hong Kong) president
Liu Jinbao … to death, suspended for two years, for the crime
of corruption,” the bank said on its Web site
(www.bank-of-china.com).

“Liu Jinbao took advantage of his position as a senior
official at the Bank of China (Hong Kong) to siphon off public
funds, breaking the law of the People’s Republic of China.”

The court had seized Liu’s financial assets, the lender
cited spokesman Wang Zhaowen as saying.

Liu’s sentence had been expected. Suspended death sentences
in China are traditionally commuted to life imprisonment.

The statement came the same day that the bank’s managing
director, Zhang Yanling, said the lender was pursuing a
multi-billion-dollar initial public offering by the end of this
year or in 2006.

The bank is in investment talks with UBS, Royal Bank of
Scotland, Singapore’s Temasek Holdings and the Asian
Development Bank, the financial magazine Caijing has said.

Corruption, virtually snuffed out in the years directly
after the Communist Party came to power in 1949, has staged a
dramatic comeback following market reforms over the past 25
years.

China’s leaders have warned that the Party could
self-destruct if it failed to rein in corruption, which helped
bring down many imperial dynasties.

Corruption is also often cited as a deterrent to foreign
investment in the banking sector, deemed one of the weakest
links of the world’s seventh-largest economy, even as Beijing
scrambles to attract foreign capital and expertise.

In 2002, Wang Xuebing was sacked from his post at China
Construction Bank over questionable loans extended during his
tenure at the Bank of China. And former Construction Bank
chairman Zhang Enzhao is now under investigation after
resigning amid a storm of corruption allegations.

Liu, who was arrested in February 2004, went on trial in
the northeastern city of Changchun in July, alongside former
colleagues Zhu Chi, Ding Yansheng and Zhang Debao.

He had been charged with involvement in embezzling 14.48
million yuan, personally or with others, and for accepting
bribes totaling 1.43 million yuan during stints in the
financial hub of Shanghai and the former British colony of Hong
Kong.

Liu headed the Bank of China Hong Kong when it listed in
July 2002. His fall from grace has been one of a string of
scandals to have hit the Bank of China.

Since embarking on high-profile reforms in early 2004,
after receiving $22.5 billion in state funds to help clean up
its balance sheet, the lender has joined other big state banks
in trying to improve internal controls and clamp down on
corruption.




comments powered by Disqus