The Asia Global Payment Summit. Bali, Indonesia. 10-11 October 2019

Agricultural Bank of China Hit with Year’s Biggest Fine Over 3.9bn Yuan Repo Fraud Case

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One of China’s big four state-owned banks has been hit with a 19.5 million yuan fine and seen four of its staff permanently banned from the banking sector over a 3.9 billion yuan fraud scandal involve its reverse repo operations.

The China Banking Regulatory Commission has announced that a Beijing branch of the Agricultural Bank of China would be fined 19.5 million yuan for severe breach of prudential regulations in relation to interbank bill repo operations at the start of 2016,

The fine is reportedly the the biggest issued by the banking regulator since the start of 2017, during a year when its heavy crackdown on lenders has seen it mete out a slew of punishments.

Four ABC branch executives – Yao Shangyan (姚尚延), Zhang Ming (张鸣), Wang Bing (王冰) and Liu Yongmei (刘咏梅), have been banned permanently from China’s banking sector, while one other executive, Long Fang (龙芳), incurred a ten year ban, and two other staff members were hit with fines of 100,000 yuan.

On 22 January 2016 ABC announced that a “major risk event” had occurred in relation to the reverse repo operations of one of the bank’s Beijing branches, involving a total sum of 3.915 billion yuan.

The authorities subsequently concluded that in May 2015 a Mr. Wang Bo (王波) colluded with Yao Shangyan to misappropriate funds from the secondary discounting of notes, in order to use the proceeds for the purchase of wealth management products and high-risk share investments which incurred huge losses.

Yao Shangyan, Zhang Ming, Wang Bing and Liu Yongming also used their positions within the bank to provide Wang Bo with banker’s acceptance bills.

 

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