CHINA / National
CCB denies claims it hid bad loans
(China Daily)
Updated: 2006-11-20 06:46
China Construction Bank (CCB) denied a report by The New York Times that
the bank had intentionally hid US$3 billion in bad loans before it went
public last year.
In a statement posted on its official website last Wednesday, the bank
said the accusation was groundless.
In an article on non-performing loans in Chinese banks, The New York
Times quoted an unidentified former CCB risk adviser as saying that up to
US$3 billion in bad loans had been intentionally hidden from outside
auditors months before the bank's first sale of stock to public investors
in October last year.
In its denial, the CCB stressed that it had strictly followed domestic
and international reporting regulations and had released all information
in accordance with relevant regulations before it went public.
"Also, our bank has established strict loan-category and categorization
procedures. The outside auditor KPMG audited the prospectus, including
the fiscal report. KPMG's audit report was unreserved," said the
statement.
"The bank is willing to provide accurate information to stockholders and
the public, according to market rules and regulations. And the bank will
also take legal action against defamation," said the statement.
Meanwhile, analysts described the accusation as illogical.
"In addition to KPMG, Morgan Stanley, as the major sales agent for CCB's
IPO (initial public offering), also audited the bank carefully for its
own benefit. US$3 billion is not a small figure that would be easy to
conceal from these leading auditors," an analyst was quoted by the
Economic Observer as saying.
In response to queries from foreign investors wondering why CCB's bad
loan ratio had dropped so sharply between 2002 and 2004, analysts said
that the country had spent almost 460 billion yuan (US$57.5 billion) to
resolve the bad assets plaguing the bank.
The 21st Century Economic Report identified the unnamed risk adviser
quoted by the New York Times as Deng Kai, 44, a graduate of Peking
University's Maths Department who went on to earn a doctoral degree from
Indiana State University in the United States.
The newspaper countered Deng's claims that he had been a senior official
at Citibank and HSBC, reporting that he had only been an ordinary staff
member at the two banks before joining the CCB through a personal
relationship with former CCB head Zhang Enzhao. Zhang was recently
sentenced to 15 years in prison for accepting bribes.
The New York Times reported that CCB fired Deng for his statements to the
press, but bank officials insisted they had dismissed him because he had
faked evidence that he had submitted in connection with sick leave. They
also said he had done poorly in the bank's annual performance evaluation.
The CCB, one of China's four major State-owned commercial banks, went
public in Hong Kong in October last year. It raised US$8 billion in its
initial public offering.
It was the first of the big four along with Bank of China, the
Agricultural Bank of China and the Industrial and Commercial Bank of
China to list its shares overseas.
Top China News
� Hu urges bigger APEC role in economic development
� President Hu to make plans for Japan visit
� China specifies government purchase list
� Chrysler in talks with China's Chery
� Hanoi in near lockdown to secure city for APEC
Today's Top News
� Hu: Patience 'key to resolving' nuclear issues
� China, Japan vow to keep ties progressing
� Six students killed in school stampede
� Sports host to tackle rumours
� Tom, Katie wed in Rome ancient castle
Most Commented/Read Stories in 48 Hours
Learn Chinese, Chinese language
No comments:
Post a Comment