Bank of China Unit Faces Fresh Scandal
HONG KONG -- For the second time in just over a year, top executives of the Hong Kong arm of the Bank of China have been implicated in a financial scandal, highlighting a legacy of corruption that complicates Beijing's efforts to publicly list its largest banks.
In a surprise move, BOC Hong Kong (Holdings) Ltd. issued a statement saying that Ding Yansheng, in charge of human resources, and Zhu Chi, who runs planning and finance, were suspended for allegedly using bank funds for "personal purposes."
The funds belonged to a group of local banks that merged to form BOC Hong Kong, and the affair predates the bank's listing in 2002, the statement said. Efforts to contact the two suspended executives weren't successful.
Of the top five managers in place when BOC Hong Kong went public, four have now landed in trouble. The former chief executive, Liu Jinbao, is in custody in China after a loan scandal last year, and one of Mr. Liu's four deputies retired after he was criticized during an inquiry into the same episode.
A history of low pay, weak supervision and politicized lending has corroded ethical standards among Chinese bank staff all the way from junior loan officers to senior managers. Industry analysts say that exposing this dark side of China's banking system could make Beijing's effort to list Bank of China and China Construction Bank, much more difficult. But it will also add urgency to the exercise.
David Webb, a shareholder activist who sits on the board of Hong Kong Exchanges & Clearing Ltd., a publicly listed company that runs the Hong Kong Stock Exchange, said the latest scandal will depress the demand for the banks' stock.
"It's a reminder to those who need reminding -- particularly overseas investors -- of the risks in mainland banks," Mr. Webb said, adding that "there's a price for those risks."
Yet forcing banks to subject themselves to scrutiny by international market regulators, even at the cost of embarrassing exposures, may be Beijing's best hope for changes in the banking sector.
Fred Hu, a managing director at Goldman Sachs, said that Beijing's main goal in bank listings isn't to raise cash. Set against government bailouts of indebted state banks, which have added up to about $250 billion in recent years, listing proceeds would be modest, estimated at around $3 billion to $5 billion each for the Bank of China and China Construction Bank.
Beijing wants the discipline and scrutiny that accompany the path to market, said Mr. Hu. He argued that the jolt to lax standards that comes with inspection by international auditors and management consultants is critical if Chinese state banks are to compete effectively against foreign competitors when the market opens fully in 2007.
Ironically, BOC Hong Kong is in many ways a model for Chinese bank reform. Its board, which has independent nonexecutive directors -- including Linda Tsao Yang, a former U.S. ambassador to the Asian Development Bank -- is an example of the kind of governance Beijing would like to see at its four biggest banks. And investors have rewarded the bank's performance since its 2002 listing.
On Tuesday, BOC Hong Kong shares closed unchanged at HK$13.30 (US$1.71) -- 56% higher than their 2002 issue price of HK$8.50. The BOC Hong Kong board said judicial authorities in China are investigating the allegations against Messrs. Zhu and Ding. It didn't say who made the allegations or when the investigation began. A spokesman at BOC Hong Kong declined to elaborate on the statement. In Beijing, Bank of China spokesman Wang Zhaowen said, "The case is being investigated right now."
Though Bank of China hasn't said whether its planned 2005 share sale will be domestic, overseas or both, it is currently seeking to line up foreign financial institutions as strategic investors.
BOC Hong Kong said its audit committee will investigate the allegations and attempt to confirm that they won't affect the company's balance sheet or operations. It has also notified Hong Kong regulators of the investigation by mainland authorities.
The Hong Kong Monetary Authority, the banking regulator, said it also "has begun an investigation into the matter." A spokeswoman declined to say whether the regulator has communicated with authorities on the mainland. An official at the supervisory department of the China Banking Regulatory Commission in Beijing declined to comment.
Although all banks face the problem that arises from the huge disparity between staff salaries and the sums of money they handle, the issue is particularly acute in China.
For instance, in the financial capital of Shanghai, a loan officer at the China Construction Bank receives a basic monthly salary equivalent to about $300. After deducting contributions for medical insurance, housing costs and pension, the take-home pay is reduced to around $200, not much more than a factory worker earns. Bonuses add a modest amount to the pay.
Traditionally, state bankers have been rewarded for increasing their loans, regardless of the quality of those loans. That has encouraged reckless lending, and bred corruption. Branch managers are leaned on by local officials to extend loans, and the secrecy that surrounds this kind of politically driven lending exacerbates the so-called moral hazard.
Lax supervision has led to spectacular embezzlement cases. In the largest case revealed by Chinese authorities, three employees of the Bank of China branch in Kaiping, in the southern province of Guangdong, are accused of stealing $485 million between 1992 and 2001. One of the three, Yu Zhendong, fled to the U.S. but was returned by U.S. authorities in April.
The case came to light just months after a loan scandal erupted at the bank's New York branch. That scandal resulted in fines against the bank of $20 million by U.S. and Chinese investigators and the dismissal of the bank's former head, Wang Xuebing, from his position as head of China Construction Bank. Mr. Wang was eventually sentenced to 12 years in prison.
After the scandal involving former chief executive Mr. Liu, BOC Hong Kong -- the city's third largest listed financial institution -- promised to revamp its internal controls.
"It's the way these things happen again and again. It just tells you that they haven't done a complete job," said Arthur Lau, an analyst at Barclays Capital. "They react when things are uncovered, but they haven't proactively reviewed all the risk areas."
中银香港再曝丑闻
就在中国银行(Bank of China)香港分行上次发生高管丑闻仅一年之后，该分行又有两名高层人士被控与财务丑闻有牵连。此事充分暴露出中国银行业腐败问题之严重，而这类问题将加大中国四大国有银行公开上市的难度。
中银香港（控股）有限公司(BOC Hong Kong (Holdings) Ltd., 2388.HK, 简称：中银香港)日前出人意料地发布公告称，公司主管人力资源的丁燕生和主管计划及财务的朱赤因涉嫌将银行资金挪作个人用途而被停职。
公告称，这些资金属于2001年参与合并组建中银香港的几家成员行，而违规行为发生在中银香港2002年上市之前。记者试图联系被停职的两位管理人士，但未能如愿。
包括丁燕生和朱赤在内，中银香港上市时在任的5位高层管理人士中已有4人落马。中银前总裁刘金宝去年因贷款丑闻被查处，目前已被监禁。刘金宝的4位副手中有一位也在因同一事件接受调查期间退休。
由于工资水平不高、监管不力和对贷款的严重行政干预等因素，中国银行业从业人员都存在严重的职业操守问题，下到基层的信贷员，上到公司高层管理人士，都在不同程度上有染。行业分析人士指出，中国银行业此一阴暗面的曝光将使中国银行和中国建设银行(China Construction Bank)公开上市的难度加大。但它同时也将增加上市的紧迫感。
香港股东权益活动家、香港交易及结算所(Hong Kong Exchanges & Clearing Ltd.)董事戴维。韦伯(David Webb)说，这起丑闻将打压市场对银行类股的需求。
韦伯说，这件事会对市场人士，特别是海外投资者发出警告，提醒他们警惕大陆银行业的暗藏风险。
不过对中国政府来说，让银行业被迫接受国际市场监管机构的调查，甚至不惜曝光丑闻，这或许是改革银行系统最好的措施之一。
高盛公司(Goldman Sachs)亚洲区董事总经理胡祖六(Fred Hu)说，中国政府希望银行上市的主要目的并不是为了筹集资金。中央政府近年来已向国有银行注资累计2,500亿美元，以缓解银行系统累累的负债。与此相比，上市筹集的资金规模则非常有限。中国银行和中国建设银行计划上市融资的目标估计分别在30亿至50亿美元左右。
胡祖六说，中央政府希望在市场化过程中接受市场规范和监督检查的洗礼。他认为，如果中国国有银行希望在2007年银行业全面对外开放之后能与外资银行抗衡，那么，大力加强内部整治并接受国际审计机构和管理咨询人士的检查就对他们而言非常重要。
颇具讽刺意味的是，中银香港在很多方面还是中国银行业改革的典型。该行的体制正是中国政府希望在四大国有银行推行的模式。其董事会聘任了独立非执行董事，其中包括前美国驻亚洲开发银行(Asian Development Bank)大使杨曹文梅(Linda Tsao Yang)。自中银2002年上市以来，投资者总体上对其表现相当认可。
周二收盘，中银香港股价报13.30港元，与周一持平。该价位较其发行价8.50港元已上涨56%。中银香港说，中国司法当局正在对丁燕生和朱赤进行调查，但 并未透露是谁对两人提出指控，以及调查是从何时开始的。中银香港发言人拒绝就公告作具体说明。而中国银行发言人王兆文说，该案目前正在调查中。
针对中国银行2005年上市的计划，该行尚未明确到底是打算在内地上市，是在海外上市，亦或是两地同时上市。不过，该行正在外资金融机构中物色战略投资者。
中银香港说，其审计委员会将就指控内容进行调查，并希望能确认这次事件不会对公司的资产负债表和业务产生影响。另外，它已将中央政府调查一事告知香港监管机构。
香港金管局(Hong Kong Monetary Authority)也表示已开始调查此事。金管局发言人拒绝透露是否已与大陆方面就此事进行过沟通。大陆监管机构中国银监会(China Banking Regulatory Commission)的一位官员拒绝发表评论。
虽然世界各国银行业从业人员的个人薪酬与所经手的资金额度间都存在巨大反差，但这一问题在中国尤其突出。
举例来说，在中国金融中心上海，中国建设银行一位信贷员的基本月工资约合300美元。扣除医疗保险、住房公积金和养老保险之后，他能拿到手的钱只有200美元左右，比一个工厂工人多不了多少。即使加上奖金，每个月的收入也增加不了多少。
一般来说，国有银行信贷人员发放的贷款越多，奖励越高，贷款质量还在其次。这种通行的做法客观上造成信贷员在发放贷款时不计后果，并导致了腐败现象的孳生。地方官员为拿到贷款或获得贷款延期，很注意与各分行经理拉关系，关系贷款的种种内幕早已成为公开的秘密，难免让人感慨世风日下。
在中国的银行系统内，监管松懈导致挪用公款的案子层出不穷。前不久在中国政府查处的最大一起此类案件中，中国银行广东开平支行的三名工作人员被控在1992-2001年期间，共计盗用资金4.85亿美元。三名被告中的余振东2001年逃往美国，今年4月份被美方遣返。
这个案子是在中国银行纽约分行的一起贷款丑闻暴露后才被发现的。纽约分行因这起丑闻被美国和中国的有关部门罚款2,000万美元，纽约分行前行长、后曾任中国银行行长和建设银行行长的王雪冰也被革职查办，后被判处12年有期徒刑。
此事后来又牵出了刘金宝，随后，中银香港决心大力整顿内部监管。
Barclays Capital分析师Arthur Lau说，这类事件一再发生，说明中银香港这方面的工作还没有到位。事情暴露后他们的确作出了反应，但是，他们平时并没有对所有的高风险部门主动进行审查。
