The head of commercial banking at ICBC's Hong Kong retail banking subsidiary has been charged by the Independent Commission Against Corruption with accepting HK$3.3 million worth of bribes from a customer for extending due dates on loans.
Derick Chan Po-fui, 50, who has worked at the mainland banking giant's Hong Kong-listed subsidiary ICBC (Asia) since 2007, was arrested on Tuesday for allegedly accepting the bribes from local businessman Zeng Wei.
Chan Yick-yiu, 43, ICBC (Asia)'s former head of real estate and finance, who is now an assistant general manager at Hong Kong's Wing Lung Bank, was also charged with accepting a HK$2.5 million reward from Zeng in return for helping him prepare loan applications. Zeng, 47, who owns a private company, United Win Holdings, was charged with offering an advantage to an agent.
This is the first major corruption scandal to hit the mainland banking sector since the biggest state owned lenders - ICBC, Bank of China and China Construction Bank - listed their shares in Hong Kong between 2005 and 2006.
China Construction Bank's former president Zhang Enzhao was sacked in early 2005, nine months before the bank's Hong Kong stock offering. Zhang took 19 bribes worth 4.18 million yuan between 2001 and 2004 from a US supplier to the bank, a mainland court ruled in 2006. He was sentenced to 15 years in prison.
In August 2005, Liu Jinbao, the former head of Bank of China Hong Kong, was given a suspended death penalty by a mainland court for embezzling what Xinhua reported was an 'extraordinary' sum of money from the bank between 1996 and 2003.
The saga is doubly embarrassing for ICBC, the mainland's biggest lender by market capitalisation because it is currently attempting to privatise ICBC (Asia), which has 44 retail branches in the territory and four commercial business centres, while its tier one capital ratio, the measure of its ability to absorb losses from soured loans and investments, trails that of its Hong Kong rivals.