Bank of Qilu investigated for loan fraud

08:57, January 06, 2011      

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The Bank of Qilu has been found to be involved in a commercial paper fraud of up to 1.5 billion yuan ($292 million), according to a report Wednesday.

Police in Jinan, capital of Shandong Province, where Qilu is based, were investigating the bank for accepting forged commercial paper, according to the report. The China Banking Regulatory Commission (CBRC) replied Tuesday that the case is under investigation.

According to a China Business News report, the bank's 2009 financial report made by Price Waterhouse Coopers had already indicated irregularities such as abnormal credit scale of some lenders and illegal deposit pledges.

Also, the bank's chairman has been confirmed to be involved in the case; and some local enterprises members of the bank have already cancelled their accounts.

A Beijing News report Wednesday, citing insiders in the banking industry, said that the likelihood of criminal actions being concluded is large, since recognizing forged papers (documents) by banks at normal operation is easy.

Other banks in the province, including the Huaxia Bank and China Citic Bank were also involved in the fraudulent behavior, quoted media reports.

Source: Global Times
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