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Sentence comes after Zhang Enzhao admits taking bribes from US supplier

Former China Construction Bank chairman  Zhang Enzhao was sentenced to 15 years in prison yesterday after pleading guilty to accepting bribes from a US supplier to  the country's fourth-biggest bank by assets, his lawyer said.

Zhang, 60, admitted taking 19 bribes worth  4.18 million yuan between 2001 and 2004, although he disputed some details in the court's decision, said Gao Zicheng, a partner at Kangda Law Firm in Beijing.

The court confiscated 100,000 yuan, HK$250,000, US$139,000, two  Tiffany watches, a massage chair and an apartment in Shanghai's Xuhui district from Zhang, according to the verdict by Beijing No1 Intermediate Court. The decision has not been  made public.

'[Zhang] committed some crimes but  does not deserve 15 years in prison,' Mr Gao said. 'I think 10 years is a more appropriate sentence.'

Any  appeal  must be made within 10 days of  sentencing.

Zhang will probably serve his time in Qincheng prison on the outskirts of Beijing, a penitentiary for political prisoners that housed the so-called 'Gang of Four' after they were jailed for their roles in the 1966-1976 Cultural Revolution.

The former chairman was fired in March  last year,  seven months before the bank's US$9.2 billion initial public offering in Hong Kong.

His predecessor, Wang Xuebing - the  chairman of Bank of China  between 1994 and 2000 and then  of Construction Bank until his arrest in 2002 - is  serving 12 years in prison on corruption charges.

The decision, coming a week  after  Industrial and Commercial Bank of China staged the world's biggest  IPO,  serves as a reminder of how endemic corruption has been in mainland banks.

'Corporate governance is certainly one of the areas we remain concerned about at the Chinese banks,' said Fitch banking analyst Charlene Chu. 'This is a problem that has occurred at all levels.'

Among the main sources of bribes in Zhang's case  were US banking software supplier Fidelity Information Services  and one of its employees, Zou Jianhua, the Beijing court verdict said.

Fidelity is being sued in a district court in Florida by former business partner Grace & Digital Information Technology for breach of contract.

Grace alleges Fidelity bribed officials at  BOC and Construction Bank, including Wang and Zhang, to secure lucrative software contracts.  It cut its ties with Fidelity  when the Construction Bank contracts  were suspended  after Wang's arrest.

Grace filed the Florida suit after losing a case against Fidelity in California in which it tried to recover US$58 million of commissions it said  were owed by Fidelity  for helping negotiate sales of US$176 million worth of software to Construction Bank.

Shanhaiyuan Investment Management and well-known nightclub owner Tan Hui were also named in the verdict as having paid cash bribes to Zhang.

Should  Zhang appeal, he will dispute the court's ruling on the scale of the bribery, Mr Gao said.

'[Zhang] did not receive the key to the [Shanghai apartment] and never stayed there, so that should not be included in the bribery amount,' Mr Gao said.

He argued some meetings with Mr Zou and his associates were in a personal, not  official, capacity and that dinners paid for by Mr Zou should not be deemed bribes.

Additional reporting by Veronica Ban



Ex-CCB chief jailed for 15 years