Former central bank boss under probe over bribery
The former head of a central bank branch in the eastern city of Jinhua is under investigation for allegedly taking bribes from a failed brokerage, Caijing magazine said yesterday.
Zhou Caikang, 44, who was deputy chief and then chief of the People's Bank of China branch in Jinhua between 2001 and 2003, was detained in May by the Central Disciplinary Commission of Zhejiang province, the report said.
The Jinhua branch of the central bank said that it would not accept any questions. The People's Bank of China did not mention the case on its website.
While corruption is rife in China's government and business, it is rare for an official of the central bank to be arrested.
Beijing has given the central bank an organisational structure that is not based on the country's cities and provinces, in an attempt to make its officials more independent and less vulnerable to bribery and corruption.
The failed brokerage, Kinghing Trust and Investment, was closed on December 31 last year and its management transferred to the state-run China Jianyin Investment, after regulators found that it had violated brokerage rules and run up debts totalling more than four billion yuan.
On December 29, five senior managers of Kinghing were detained in Jinhua by the Central Disciplinary Commission and taken to Hangzhou, the provincial capital, for investigation.
Kinghing is said to have bought an apartment at market price and sold it to Mr Zhou at a steep discount.
The Jinhua branch was responsible for the initial approval of a brokerage licence for Kinghing, which was then sent to Shanghai and Beijing for final approval.
It was during Mr Zhou's time in Jinhua that Kinghing was most active, recruiting clients and, as it turned out later, running up debts of hundreds of millions of yuan from losses in stock market trading.
In October 2003, Mr Zhou was recalled to Hangzhou and took part in the establishment of the Zhejiang Rural Co-operative Association, of which he became deputy chief in August 2004.
The unwinding of Kinghing's debts has proved to be a painstaking undertaking, with the deadline to complete the process put back to the end of this year from June 30, because of the complexity.
It issued financial products totalling an estimated 7.6 billion yuan to dozens of corporate and nearly 9,000 individual clients, of whom 3,400 are owed more than 200,000 yuan each and several hundred are owed more than one million.