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Bohai accused of mishandling funds
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China Bohai Bank, a national joint-stock commercial bank based in the northern city of Tianjin, has been accused by an enterprise client of secretly using its 2.8 billion yuan (US$438 million) in deposits as collateral.
Jiangxi Jemincare Group Co, which focuses on R&D and production of modern Chinese medicine, biological agents and health-care products, said its deposits in Bohai Bank were used as collateral by the bank in secret for a petrochemical company in Nanjing, Jiangsu Province, and there was no connection between the two firms.
Bohai Bank issued a notice on its official website on Sunday, saying it has noted certain media reports regarding the pledge and guarantee business of its Nanjing Branch.
“We have reported the matter to the public security authorities after discovering ‘abnormal behaviors among (our) enterprise clients’ and will seek judicial solutions according to law,” the bank said.
A day later, the Hong Kong-listed lender made an announcement on the stock exchange’s website, saying the bank will, as always, “resolutely safeguard the legitimate rights and interests of its customers and ensure the safety of customers’ capital.”
Bohai said its daily operations remained normal, and the issue will “not have a material adverse impact” on operations.
The original allegation surfaced in the middle of August when Yu Jianghua, general manager of Wuxi Jemincare Shanhe Pharmaceutical Co, a subsidiary of Jemincare Group, received a phone call from an officer at Bohai Bank’s Nanjing branch, saying that someone was handling a deposit pledge business of the company with a quota of 500 million yuan at the counter, according to reports by the Paper.com.
It was not until then that Jemincare learned its deposit had been pledged without its consent.
When Jemincare asked Bohai to offer its transaction records, the latter refused to do so, the pharma firm said. Jemincare reported the case in September to Wuxi police in Jiangsu Province.
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