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China Investigates Ex-Head of Top Bank - 2002-01-15


China says the dismissed president of a major state bank is being investigated for problematic loans made while he was head of the Bank of China. U.S. authorities also are reportedly investigating the bank's activities in the United States.

China's central bank chief says that Wang Xuebing, the fired president of China Construction Bank, is under investigation for several loans made during his time as head of the Bank of China.

"Mr. Wang bore responsibility for lending cases at branches of the Bank of China, including some foreign branches," said People's Bank of China governor Dai Xianglong at a news conference on Tuesday.

Mr. Dai said "relevant departments are investigating the case," and that Mr. Wang has been replaced by his deputy, Zhang Enzhao at China Construction Bank. "The Communist Party Central Committee and the State Council China's cabinet decided to dismiss Mr. Wang," said Mr. Dai.

Hong Kong news media report that the U.S. Treasury Department is investigating the Bank of China's activities in the United States. Mr. Wang was dismissed last week from his position at China Construction Bank and as head of China International Capital Corporation (CICC), a joint-venture investment bank. China Construction Bank and American investment bank Morgan Stanley are shareholders in CICC.

Mr. Wang was president of the Bank of China for nearly seven years. He was appointed head of China Construction Bank in early 2000. Both China Construction Bank and the Bank of China are two of the country's four big state commercial banks.

One of the country's most prominent banking officials, Mr. Wang made frequent appearances at international financial conferences and argued for aggressive reforms of China's banking system. The country's banks are heavily burdened with government-mandated loans to failing state-owned enterprises. The banks also are under pressure to modernize so they can compete with foreign institutions as China integrates into the World Trade Organization.

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