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SCMP Reporter

Corruption investigation widens with deputy CEOs suspended and questioned

Two deputy chief executives suspended by BOC Hong Kong (Holdings) are being investigated in connection with the corruption case involving former bank chief executive Liu Jinbao.

The investigation  of Zhu Chi and Ding Yansheng, announced in the early hours of Monday morning, is being conducted by the Supreme People's Procuratorate in Beijing, according to a spokesman for BOCHK's parent company, Bank of China (BOC).

The investigation is the latest in a string of scandals to hit China's premier foreign-exchange lender and  comes as BOC is in talks  with potential strategic investors ahead of  a stock market flotation planned for next year.

In an announcement through the Hong Kong stock exchange, BOCHK said Mr Zhu and Mr Ding  were being questioned in relation to the 'unauthorised distribution for personal purposes of certain funds belonging to the controlling shareholder of [BOCHK's] former constituent banks'  before its July 2002 initial public offering in Hong Kong.

The two executives were co-operating with the investigations in an undisclosed mainland location,  the BOC spokesman said.

Mr Zhu, 49, has been suspended since Monday from his job as BOCHK deputy chief executive  responsible for business planning and finance. He was also in charge of  corporate banking and treasury.

Mr Ding, 50, has been suspended from his position as deputy chief executive  with responsibility for business support services and  general manager of human resources.

The Hong Kong Monetary Authority (HKMA) has launched  its own investigation into the suspension of the two executives  'to determine what happened, why it happened, and to see if we can come up with any lessons learned, and how to prevent anything like this in the future', HKMA deputy chief executive William Ryback said.

'We have already been in contact with our compatriots on the mainland to determine if they know anything more that we should know, and also to see whether or not we can interview the individuals involved,' Mr Ryback added, noting that  the HKMA had also contacted  local police 'to make sure they are informed about what's going on'.

It is not known what is the exact connection between the allegations levelled at  Mr Zhu and Mr Ding and the probe into Mr Liu, who was sacked as BOC vice-chairman in February as a result of a corruption investigation reportedly dating back to his time as head of BOC's Shanghai operations in the mid-1990s.

Between April and September 2001, Mr Ding, formerly based in Beijing, was general manager of the personnel division of BOC's Hong Kong-Macau Regional Office, where Mr Zhu has been a BOCHK deputy chief executive since June 1998.

BOCHK's statement said the misallocated funds did not form part of assets of the listed company, its subsidiaries or their customers.

It said the responsibilities of Mr Zhu and Mr Ding would temporarily be shared between BOCHK chief executive He Guangbei, deputy chief executive David Lam Yim-nam and chief operating officer Raymond Lee Wing-hung.

'The bank is now in a management vacuum,' a source close to the bank said.

Mr Lam is the sole survivor of four deputy chief executives, once known as BOCHK's 'four pillars'.

One of the four, Or Man-ah, resigned from the bank amid the investigation last year into its decision to grant - against the advice of its own chief risk officer and on questionable security - a HK$1.77 billion loan to now jailed property tycoon Chau Ching-ngai.

Mr Lee, hired after  a recommendation by the committee investigating the Chau loan, has been at the bank  for only two months.



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