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Top banker on embezzlement charges

By Jane Chen | June 26, 2009, Friday | Online Edition

A TOP official with the Guangdong Development Bank has been arrested for alleged embezzlement.

Wang Xin, 58, a GDB vice governor, was arrested on June 19, Caijing.com reported. Prosecutors searched Wang's home and office on June 5.

Also arrested were Lei Da, vice general manager of the bank's assets management department, and another man surnamed Hou who reportedly had close contacts with the bank, the Caijing report said.

Another man involved is Li Shujin, manager of the bank's logistics department who has been granted bail because of illness.

GDB refused to comment yesterday.

This week, the GDB chairman Li Ruohong stepped down. The board agreed on June 22 to accept his resignation.

Li, 54, cited health as one of the reasons for his resignation after 10 years' work as the bank's top official.

The ongoing investigation into Wang is linked to the bank's huge bad assets settlement project between 2005 and 2006, insiders said.

Wang was the GDB's managing director sent over by China Life Insurance Co Ltd, one of the bank's shareholders. As one of the bank's seven vice governors, he was in charge of human resources, supervision and technology.

In 2005-2006 he had played a key role in the bank's bad assets settlement project worth 50 billion yuan (US$7.32 billion).

Insiders said that there may have been illegalities in the settlement project.

As part of the project, the bank sold its assets to Citigroup for 24.1 billion yuan in November 2006 and auctioned off a package of assets valued at 33.3 billion yuan.

It also sold a 100-percent stake in the Guangdong Guangkong Group Co Ltd and the group's 1.72-billion-yuan of creditors' rights.

In February 2006, GDB transferred 56 billion yuan valued assets to a company affiliated with the Guangdong provincial government, which later assigned a trust company to settle the nonperforming assets.



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