Beijing [China]Oct 28 (ANI): China Bohai Bank, a national joint-stock company, is accused of secretly using a customer’s $ 438 million deposits as collateral.
The allegations came from Jiangxi Jemincare Group Co, which announced that its deposits at Bohai Bank were being used by the bank in clandestine security for a petrochemical company in Nanjing, an English-language newspaper in east China, SHINE reported.
The company also said there was no link between the two companies.
The news made Bohai Bank a trending topic on China’s Weibo microblogging website, which attracted 240 million clicks and around 8,000 discussions as of Wednesday afternoon.
In general, if the deposit is to be used as a collateral, companies are required to provide a range of certification materials, and under normal circumstances banks should conduct rigorous audit controls when doing such business, SHINE industry insiders quoted as saying.
Meanwhile, Bohai Bank posted a notice on its official website on Sunday saying it had taken note of certain media reports about the deposit and guarantee business of its Nanjing branch, SHINE said.
“We reported the matter to the public safety authorities after discovering ‘suspicious behavior on the part of (our) corporate customers’ and will seek legal solutions under the law,” the bank said.
The case is still being investigated and those involved could face a limited term of imprisonment of more than five years, said a lawyer.
Jiangxi Jemincare Group Co focuses on research and development and the production of modern Chinese medicine, biological agents and health products. (ANI)
