China bank president fired over BOC loans


The Bank of China is looking to float its Hong Kong and Macao subsidiary on the stock market

HONG KONG, China (CNN) -- China Construction Bank president Wang Xuebing was sacked and is being investigated over loans made during his time at the helm of the Bank of China, officials confirm.

Chinese officials said Friday only that Wang Xuebing had been removed from his post, but China Construction Bank clarified this week that he had been fired.

Central Bank governor Dai Xianglong said Tuesday that Chinese authorities are investigating Wang over loans made while Wang was in charge at the Bank of China.

"Wang Xuebing had responsibility of leadership and direct responsibility for lending cases that happened in some individual Bank of China branches," Dai said, when asked why Wang was fired.

"The relevant departments will continue investigating the problem of comrade Wang Xuebing," he added.

'Problems'

Wang is being held responsible for "major loan cases" that happened while he was president of the Bank of China, The Wall Street Journal reported, quoting an executive at China Construction Bank (CCB).

Wang headed the Bank of China, the country's main foreign-exchange bank, for seven years before being transferred to CCB in early 2000.

But the Communist Party last week stripped him of his post at CCB, as well as his chairmanship of China International Capital Corp., an investment bank joint venture with Morgan Stanley.

"The reason for his departure was because during his tenure at Bank of China there may have been some problems, not because of anything at this bank," a CCB spokeswoman told Reuters news agency.

The order for his removal came from the Communist Party's Organization Department and its Central Financial Working Committee.

Offering could be disrupted by probe

The Bank of China is now under investigation by Chinese authorities and is reportedly the subject of a probe by the U.S. Office of the Comptroller of the Currency.

Wang also headed the Bank of China's New York office from 1998 to 1993, before taking over as president. BOC has offices in New York and Los Angeles.

Details are scant as to the nature of any investigation by the OCC, which falls under the U.S. Treasury Department. But the probe reportedly goes beyond regularly scheduled audits.

They threaten to disrupt a proposed stock offering. The Bank of China is looking to raise between $4 billion and $5 billion by listing its Hong Kong and Macao subsidiary.

No date has yet been set for the listing. In early 2001 Wang said CCB was also looking at going public although no time frame was given.

Wang, a 'young turk' of Chinese banking who tool the helm before age 50, has been rumored to be under investigation by Chinese authorities for more than a year.

At the end of 2000, he said news reports to that effect were irresponsible. He said he knew of no financial problems during his time heading the BOC in New York.