| Auditor finds misconduct affecting US$2b at three major banks |
BEIJING, June 28 (AP) -- Auditors have found misconduct affecting 15.5 billion yuan (US$2 billion; €1.5 billion) at three of China's biggest banks, the country's auditor general reported.
The National Audit Office report, issued late Wednesday, added to an embarrassing string of revelations of mismanagement at China's state-owned banks at a time when many are raising money from foreign investors.
The latest investigation found violations of law or regulations at Bank of China Ltd., the country's No. 2 commercial lender, Bank of Communications Co. and Merchants Bank Co., Auditor General Li Jinhua said in a report to the national legislature. A copy was posted on the agency Web site.
Violations included lending money for real estate development in defiance of government efforts to slow speculation in the industry, the report said. It did not single out any bank employees or say whether the mishandled money was recovered.
Last week, China's bank regulator announced it was punishing eight banks for making improper loans used by two state companies to speculate in stocks and real estate.
Investigations at other banks have revealed embezzlement, employees taking bribes to approve improper loans or violations of regulations on the size and purpose of loans.
Many revelations have stemmed from audits carried out in preparation for selling shares to foreign investors.
The scandals appear to have done little to dent foreign enthusiasm for Chinese bank stocks.
An initial public offering by Industrial and Commercial Bank of China Inc., the country's biggest lender, set a world record in October by raising US$21.9 billion. Other banks also have raised billions of dollars with foreign offerings.
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