SPD Denies Losing 160bn Yuan to Shell Companies in Chengdu

35

Shanghai Pudong Development Bank (SPD) has countered claims that the bank’s Chengdu branch was defrauded of billions of yuan.

Chinese media reports from early April claimed that SPD’s Chengdu branch had provided vast sums of credit to 2010 shell companies that had been fraudulently established or created using falsified registration.

According to the allegations the Chengdu branch provided 1655 credit transactions to the shell companies for a total sum of more than 160 billion yuan.

The assets held by these shell companies began to suffer in recent years as economic adjustments exacerbated risk in local industries such as the coal sector.  SPD Chengdu adopted “irregular” methods to conceal the true quality of these assets as local big wigs rapidly withdrew from development projects.

The China Banking Regulatory Commission (CBRC) and the Sichuan banking regulatory department arranged for SPD’s headquarters to send a work inspection team to the Chengdu branch in July of last year after initially uncovering these issues.

The team discovered that the more than 160 billion yuan in credit extended to 2010 shell companies have in fact been used by just 7 major groups, that were controlled by a total of just four individuals – Tang Mingyang, Luo Shandong, He Wenjun and Yang Fengming.

SPD has since denied the allegations, stating that the “relevant information is not consonant with fact.”

“In recent years, due to the impact of a downturn in the regional real economy, our bank’s Chengdu branch saw its asset quality come under pressure, with a surge in overdue loans owed by sectors suffering from overcapacity such the coal industry,” said SPD in an official statement.

“Our bank head and the branch bank adopted the necessary measures to strengthen regulation, and actively disposed of and resolved the problem.

“Currently our bank’s Chengdu branch is operating as normal, and risk is completely under control.”

LEAVE A REPLY

Please enter your comment!
Please enter your name here