The Bank of China (BOC) on Saturday accused a Beijing-based real estate firm of swindling approximately 645 million yuan (US$78 million) in mortgage loans.
Wang Zhaowen, a bank spokesman, said the real estate firm, known as Beijing Huayuanda Real Estate Development Co., has obtained the money for its "Senhao Apartment Project" during December 2000 and June 2002 from the BOC's Beijing Branch using falsified housing purchase contracts.
The loans were then diverted by the company to unspecified place outside Beijing, and the project suspended, said the spokesman.
The bank said it reported the case to local police in September 2002 after it discovered what it called risky loans.
The bank has removed Xu Weilian, deputy chief of the branch's retailing sector, from his position and from the bank due to his role in offering the loans, said the spokesman.
Other employees held responsible for the problematic loans were also penalized by the bank.
The China Banking Regulatory Commission (CBRC), the country's watchdog of banking sector, issued a circular last month urging all banks around the country to exert greater efforts and adopt substantial measures to prevent and control risks.
The commission said some banks have encountered frequent and major fraudulent cases, causing huge losses, due to the lack of supervision, failure in punishing malfeasant activities, and weakness in risk and internal control. Leading management staff and those held responsible have to be dealt with and punished.
The public should be given access to reports about the occurrence of these cases, according to the circular, which offers 13 instructions concerning the management and risk control of banks.
(Xinhua News Agency April 3, 2005)
