China Bohai Bank, a national joint-stock commercial bank, has been accused of secretly using a customer’s $ 438 million in deposits as collateral. The charges came from the company ‘Jiangxi Jemincare Group Co’, which informed that its deposits at Bohai Bank were secretly being used as collateral by the bank for a petrochemical company in Nanjing, an English-language newspaper in eastern China. China, SHINE reported.
The company also said there was no connection between the two companies. The news made Bohai Bank a hot topic on the Weibo microblogging website in China, attracting 240 million clicks and around 8,000 threads as of Wednesday afternoon.
If the deposit is to be used as a pledge, it is usually necessary for companies to provide a number of certification documents, and under normal circumstances, banks should carry out strict audit control when dealing with such matters, have said industry insiders cited by SHINE. At the same time, Bohai Bank posted a notice on its official website on Sunday, claiming to have taken note of some media reports regarding the pledge and guarantee activities of its Nanjing branch, SHINE reported.
“We reported the matter to public security authorities after discovering ‘abnormal behavior among (our) corporate clients’ and will seek legal remedies according to the law,” the bank said. The case is still under investigation and those involved could face a jail term of more than five years, a lawyer said.
Jiangxi Jemincare Group Co focuses on the R&D and production of modern Chinese medicine, biological agents and health products. (ANI)
(This story was not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)